World Bank projects crude oil to average $79 per barrel in 2027

The World Bank’s latest Commodity Prices Outlook indicates a significant downward trend for crude oil prices over the next few years. The international financial institution projects that oil will average $79 per barrel in 2027 before declining further to $70 per barrel in 2028. This forecast follows an expected average price of $91 per barrel in 2026, marking a steady retreat from higher levels as global market dynamics shift toward more sustainable energy sources and reduced demand.

A primary driver of this projected price decline is a forecast contraction in global oil consumption. In 2026, the World Bank anticipates a 2.5% drop in demand, which would represent the third-largest decline on record. This trend is largely attributed to a decrease in transport fuel demand as the adoption of electric vehicles accelerates, particularly in China. Furthermore, sustained high prices have prompted a shift toward alternative energy sources, while disruptions in petrochemical production have also curbed overall consumption levels globally.

On the supply side, the global market is expected to see a 5.2% reduction in output during 2026. This contraction is heavily influenced by significant production losses in the Middle East, though these are partially offset by modest production increases in advanced economies. Despite these regional losses, the World Bank notes that adaptations in oil exports from the Gulf region are likely to support a gradual growth in shipments over the coming years, helping to stabilize the market amidst shifting geopolitical conditions.

These projections highlight the broader global transition away from fossil fuels as environmental policies and technological advancements reshape energy markets. For oil-dependent economies and energy sectors, the anticipated decline toward $70 per barrel by 2028 underscores the growing impact of cleaner transportation and the volatile nature of supply chains in conflict-prone regions. Governments and industries will likely need to adjust their fiscal strategies as the era of high oil prices faces pressure from the rising adoption of green technology.