SHANA (Tehran) – The former head of international affairs at the National Iranian Oil Company said the global oil market in 2026 will be shaped more than anything else by uncertainty over US tariff policies and the responses of Washington’s trading partners — a factor that could keep global oil demand under pressure and prevent a sharp rise in prices.
The global oil market faces a range of political, economic and technological uncertainties in 2026, from U.S. tariff policies and sanctions to the growing role of artificial intelligence in energy trading. To examine the main challenges, price scenarios and the outlook for the oil market, we spoke with Hojatollah Ghanimifard, former head of OPEC’s Petroleum Studies Department. The full interview follows.
What do you see as the biggest challenge for the oil market in 2026?
In my view, the biggest challenge for the oil market in 2026 is the continued uncertainty surrounding U.S. tariff policies and the retaliatory responses of its trading partners. The imposition or escalation of tariffs by the United States, and countermeasures by other countries, could intensify uncertainty in the global economy — a trend that would directly affect global oil demand. If these tariff pressures persist, industrial production in many countries would decline, followed by a drop in fuel consumption.
Part of that consumption relates to crude oil and petroleum products, while another part involves natural gas, renewables and even coal, which is still used in countries such as China, India and some European states. As a result, the lack of clarity over final tariff policies between the United States and its counterparts represents the most significant challenge facing the oil market in 2026. This uncertainty could weigh on oil demand and keep prices near current levels, around $60 a barrel, depending on the crude grade, in the year ahead.
Will oil prices surge or remain stable?
That largely depends on how the U.S. economy ultimately settles its trade relations with partner countries, particularly in terms of tariffs. What matters is reaching a clear outcome. However, given the U.S. government’s broader policy direction — which is explicitly aimed at keeping oil and transportation fuel prices low — it is reasonable to assume Washington will seek to prevent price increases by any means necessary.
Accordingly, there is little expectation of a significant rise in oil prices, and a price spike appears unlikely under conventional forecasts and current global economic conditions.
Oil price spikes typically occur under unpredictable circumstances. Clearly, if a major event were to take place — for example, a crisis in key oil-producing regions such as West Asia or North Africa that sharply reduces exports — a price surge would be entirely possible. The real question is whether such scenarios can be considered reliable forecasts. Based on the data currently available, I do not believe a price spike should be factored into present projections.
Which country will have the greatest influence on oil prices?
The United States, as both the world’s largest oil producer and largest consumer, plays a decisive role, especially given its policies aimed at curbing price increases. Some OPEC members, particularly within OPEC+, have substantial production capacity, and Russia is also an important player. But the question is whether these countries intend to confront the United States directly on oil policy. In my view, they do not.
Therefore, the country with the greatest influence on oil prices remains the United States. In addition, U.S. oil exports are expected to rise significantly in 2026. Although the figures have not yet been officially confirmed by U.S. oil authorities, some reports suggest exports could reach around 7 million barrels per day, underscoring Washington’s pivotal role in the oil market.
What are the consequences of underinvestment in upstream oil?
Some analysts predict that relatively low oil prices in 2025 have squeezed profits for many producers, particularly private and U.S. companies. While these firms have managed to stay in business, they may refrain from making major investments in 2026 to preserve profitability and avoid further price declines. In other words, production may remain limited to previously planned levels, with no significant expansion.
Such reduced or stagnant investment could have long-term consequences, but major price shocks in the short term — even over the next 12 months — appear unlikely unless unexpected developments occur in major producing countries, particularly those with large supply capacity, leading to rapid production cuts or shutdowns. That scenario would be exceptional and improbable.
Even under sanctions or international restrictions, countries such as Russia, Venezuela and Iran are unlikely to see disruptions severe enough to trigger major oil price shocks in 2026.
How will sanctions affect oil supply next year?
Sanctions generally fall into two categories. First are country-specific sanctions imposed by one country or a group of countries against another, such as those targeting Russia and, to a lesser extent, Iran. These measures restrict exports to certain regions and alter trade routes. Second are the economic and political motives behind sanctions. For example, the United States and its European allies seek not only political leverage but also to keep their own export markets open by limiting the presence of rival oil exporters.
In my assessment, sanctions alone cannot significantly alter oil supply from targeted countries. Experience in recent years, particularly in 2025, has shown that sanctions have had a limited impact on overall supply, especially as new energy sources have met part of global demand — notably in advanced industrial countries — slowing the growth of oil consumption worldwide.
Which new technology could transform the oil market?
Artificial intelligence has the potential to significantly transform the oil market, especially in trading. AI can play an effective role in both physical crude oil transactions and paper oil trading, reducing many of the complexities that exist without such technology and cutting costs in the process.
In several industries, advanced AI systems operating continuously have sharply reduced costs, particularly compared with employing specialized human labor for the same tasks. While this can lead to job losses, it also creates new employment opportunities. A new generation of specialists is moving into AI, much as new information technology jobs emerged when computers displaced older roles.
AI can be highly effective across the oil industry — not only in markets but also in upstream and midstream operations, where its use has begun in some countries, albeit not yet at the scale seen in other sectors. Overall, AI is likely to influence upstream, midstream and downstream activities, improving efficiency and lowering costs.
Which segment of the oil value chain will change the most?
In my view, the downstream sector is likely to experience major changes sooner than other segments due to AI adoption, particularly in crude oil and petroleum product trading — both in futures markets and in physical transactions. The effects of this transformation are likely to be more visible than in other sectors during 2026.
If you were to make a bold oil price forecast, what would it be?
Years ago, when I first entered the international oil sector, I read an article by a veteran downstream expert, now deceased, from our region. He argued that oil price forecasts are inherently unreliable because they lack precise information.
I would add that, aside from certain economic models that can project price trends over a defined period based on clear assumptions, most forecasts — whether bold or cautious — are little more than speculation and lack firm logic or certainty.
Since I have not worked with econometric models for oil price forecasting, nor reviewed studies that offer reliable models with defined probabilities, I prefer not to present a forecast.
What unexpected shocks could occur in 2026?
By definition, a “shock” is unexpected; otherwise, it would not be a shock. Such events are not limited to oil markets or the upstream, midstream or downstream sectors. They can also affect substitutes such as gas, coal and renewables, including hydrogen, wind and solar energy, which meet part of global demand for oil and petroleum products.
Based on available information, there are no concrete forecasts of such shocks in the oil market. Because shocks are inherently unpredictable, their occurrence cannot be reliably anticipated.
The only potential event with such an impact would be military conflict involving powerful or independent countries that possess oil resources and supply capabilities. In that case, conflict could manifest as a shock to the oil market. I hope such events do not occur, but given the behavior of some U.S. officials who at times act outside international norms, oil-producing countries must be prepared and plan ahead to protect national interests if pressures or actions arise.
Name three major oil market developments in 2025.
First was the election of Donald Trump as U.S. president and the unfriendly policies adopted toward the global oil industry. These policies aimed to strengthen U.S. oil and gas and replace traditional exporters in global markets. While not directly targeting oil, they had significant indirect effects. A clear example was the suspension of offshore wind farm projects in the United States, particularly around New York and the Northeast, less than a month after the new administration took office, shifting investment priorities toward oil and gas. U.S. gas export policies also replaced traditional sources such as Russian gas in Europe, strengthening Washington’s role in global energy markets.
Second were U.S. military actions against oil-exporting vessels, particularly in the Venezuela region. Attacks on ships under the pretext of countering drug trafficking highlighted U.S. military power and its impact on oil markets. Beyond their direct effect on exports, such actions served as a warning to other countries that the United States can act against their interests even in territorial waters, affecting market security and international relations.
Third were environmental issues and U.S. policies in this area. Washington’s withdrawal from certain environmental agreements and cooperation, including in Brazil, signaled a reluctance to commit to international efforts to control energy-related pollution. While this may appear beneficial to the oil industry in the short term, it could intensify long-term environmental concerns and ultimately undermine the credibility of fossil fuels.
Together, these three developments illustrate the geopolitical, economic and environmental forces shaping the oil market in 2025 and provide a basis for analyzing trends in 2026.