Latin America Becomes Key Driver of New Oil Supply as 2026 Surplus Looms, Report Finds

Latin America is expected to be a leading source of global oil supply growth in 2025 and 2026, with new production from Brazil and Guyana significantly expanding global output, according to forecasts from Oxford Economics.

The advisory firm projects that global oil production will reach about 106 million barrels per day in 2026, supported by a 1.6 million-barrel-per-day supply increase. Brazil and Guyana together are expected to contribute roughly 1.6 million barrels per day across 2025–26, making the region one of the strongest contributors outside the United States and the Middle East.

This expansion positions Latin America as one of the few regions delivering reliable medium-term supply growth, as Bloomberg explains. Oxford Economics notes that Brazil's offshore projects and Guyana's rapid development of the Stabroek block are reshaping the global production map, helping to generate a surplus that could keep prices in the high-$50 range next year.

The firm expects Brent crude to end 2026 near $58 per barrel.

While U.S. shale remains an important factor in balancing the market, its growth is expected to moderate. The firm forecasts U.S. output to rise by about 400,000 barrels per day in 2026, far less than the combined contribution from Brazil and Guyana. The relative outperformance underscores Latin America's emerging role in supplying new barrels as other producers face declines or plateauing capacity.

OPEC's planned easing of production cuts in the second half of 2026 could add additional barrels, but analysts say the bloc's contribution will not diminish the importance of Latin America's output trajectory. For global buyers, especially in Asia, the region is becoming an increasingly central source of medium-sour and light-sweet crude.

Longer-term outlooks point to structural challenges that could elevate the region's importance even further. In a sprawling report by UAE's Khaleej Times framed around the Oxford Economics forecast, Ole Hansen, head of commodity strategy at Saxo Bank, said that despite near-term abundance, the industry faces "a deeper structural tension" due to declining mature fields and insufficient investment.

Hansen warned that current price levels may not support the large upstream commitments needed globally, creating potential supply risks later in the decade. He also added that regions with ongoing development momentum — including Brazil and Guyana — may play a stabilizing role if other producers struggle to maintain output.