Oil Price Forecast - Oil Hover Around $63 WTI, $68 Brent as Latin America Quietly Redraws the Supply Map

WTI (CL=F) and Brent (BZ=F) – crude locked in a $60–$70 regime

WTI (CL=F) trades around $62.89 per barrel, up roughly $0.05 on the session (+0.08%), while Brent (BZ=F) sits near $67.75, higher by about $0.23 (+0.34%). Murban is quoted close to $68.32, the OPEC basket hovers around $68.06, and U.S. coastal grades like Louisiana Light change hands near $64.58. The entire light–sweet complex is effectively compressed into a $63–$69 range. That price action confirms a market that has already priced softer demand forecasts and is now oscillating in a tight band while it digests new Latin American shale supply, supervised Venezuelan heavy crude, and a slower energy transition in the U.S.

Global demand downgrades versus supply growth – why WTI (CL=F) and Brent (BZ=F) are capped

IEA demand revisions that cut 2026 growth expectations triggered a roughly 3% pullback in crude, and the recovery since then has been modest. Even after the drop, WTI (CL=F) has only managed to stabilize around $62–$63, with Brent (BZ=F) anchored below $68. The tape is telling you demand is growing more slowly than bulls hoped, geopolitical risk is not commanding a serious risk premium, and the balance is being held together more by producer discipline and OPEC+ management than by runaway consumption. As long as global agencies lean toward lower demand growth and inventories remain comfortable, rallies in Oil, WTI (CL=F) and Brent (BZ=F) will meet selling pressure well before the $80 handle.

Mexico – oil exports now just 3.2% of total sales, a structural shift away from crude

Mexican oil exports in 2025 fell 26.4% year-on-year to about $21.246 billion, even as total exports of Mexican goods rose 7.6% to $664.837 billion. Crude now accounts for only 3.2% of total exports, the lowest share in decades. Ten years ago, oil contributions looked completely different: in 2014 it was 10.8% of exports, then 6.1% in 2015, 5.0% in 2016, 5.8% in 2017, 6.8% in 2018, 5.6% in 2019, 4.1% in 2020, 5.9% in 2021, 6.8% in 2022, 5.6% in 2023, 4.6% in 2024, and finally 3.2% in 2025. Mexico has clearly pivoted toward manufacturing and diversified exports. For the Oil, WTI (CL=F) and Brent (BZ=F) complex this means Mexico is evolving into a fiscal hedger and internal balancer, not a decisive marginal supplier. The global market will not be driven by Mexican export volumes; instead Mexico is one more country using hedging and tax instruments to stabilize its public finances while the real supply growth shifts elsewhere.

Mexico’s hedge and Welfare Oil Tax – revenue protection without extra barrels for the market

The sovereign oil price coverage program continues to protect budget revenues when the Mexican export mix drops below the insured level. It was crucial in 2020, absorbing the shock when prices collapsed, but has not been needed in 2021, 2022, 2023, or 2024 because average realized prices sat above the protected threshold. That confirms hedging is a fiscal backstop, not a bullish signal for physical supply. On top of that, the Welfare Oil Tax introduced in November 2024 replaced multiple upstream levies with a single 30% rate on oil and 11.63% on non-associated gas. The change simplifies planning for Petróleos Mexicanos, but it doesn’t add new barrels to the seaborne market. Mexico is defending its revenues and accepting a smaller export footprint, which makes it largely irrelevant for the next leg in WTI (CL=F) and Brent (BZ=F) beyond its role as a disciplined, hedged producer.

Argentina – record 861,380 bpd crude, Vaca Muerta shale is now a real global supply pillar

Argentina’s output numbers for December 2025 confirm that the country has become a meaningful growth leg for global oil supply. Crude production hit a record 861,380 barrels per day, up 2% month-on-month and 14% versus a year earlier, almost double the 494,721 bpd printed a decade ago. On the gas side, production reached 4.6 billion cubic feet per day, 7.4% higher than the prior month and 5.7% above the same month in the previous year, even though it remains below the record 5.7 bcf/d registered in July 2025. This is not marginal output. At current WTI (CL=F) levels around $62.89, this volume is fully economic and gives the market a robust, scalable non-OPEC supply source that competes directly with higher-cost barrels elsewhere.

Shale dominance in Argentina – 69% of crude and 65% of gas from Vaca Muerta at $36 breakeven

The Vaca Muerta shale is the core engine. In December 2025, shale oil production reached a record 593,488 bpd, representing 69% of total crude output. That figure was 0.6% higher than November and 31% above December 2024. Shale gas came in at 3 bcf/d, up 12% over both the previous month and the prior year, accounting for 65% of national gas output, even though it was 18% below the July 2025 peak of just under 3.8 bcf/d. With a breakeven as low as $36 per barrel, Vaca Muerta can continue expanding in a WTI (CL=F) environment at $55–$65 without any stress. For the global market this is critical: every time WTI (CL=F) approaches the mid-70s, traders know Argentina has a runway of profitable drilling capacity that can respond, adding a structural cap to price rallies.

YPF’s $36 billion plan – targeting 1 million boe/d while Oil trades in the $60–$70 band

State-controlled YPF is the central player in this story. In December 2025, it produced 384,397 bpd of crude, about 55% of national output, with 86% of that volume coming from shale oil in Vaca Muerta. On the gas side, YPF delivered 947,191 mcf/d, roughly 20% of Argentina’s total, and 80% of that was shale gas. The company plans to invest nearly $36 billion from 2025 to 2030, with the goal of lifting total hydrocarbon output to 1 million boe/d, almost double the 553,009 boe/d recorded in December 2025. The projected mix is 47.5% crude, 440,000 boe/d gas and 75,000 boe/d NGLs. Over the industry as a whole, hydrocarbon investment in 2026 is expected to reach around $11 billion, up 17% from $9.4 billion in 2025, with most capital targeting Vaca Muerta. The underlying resource base – 16 billion barrels of shale oil and 308 trillion cubic feet of shale gas – ensures that if WTI (CL=F) and Brent (BZ=F) can hold above the low 50s, Argentina can continue scaling, reinforcing the ceiling on long-term price spikes.

Venezuela – Treasury-supervised oil revenues, $1B in 5 weeks and a $5B pipeline of crude sales

Venezuelan crude is returning to the market through a tightly controlled system where all sales revenue passes via U.S. Treasury-supervised escrow accounts. Major trading houses like Vitol and Trafigura execute transactions under strict licensing, and multi-agency approvals track every deal. Early operations have already processed over $1 billion of crude sales in roughly five weeks, with contracted flows pointing to another $5 billion due to move through these channels in the coming months. The framework keeps sovereign ownership in Caracas but centralizes cash flows in a structure that shields revenues from creditor seizures. For Oil, WTI (CL=F) and Brent (BZ=F), the key is that sanctioned barrels are being normalized in a legally compliant way, making it easier to scale volumes if infrastructure and capital allow.

Venezuelan production math – from 500–700k bpd today to multi-million-barrel scenarios

Current Venezuelan output is estimated between 500,000 and 700,000 barrels per day. At $70–$75 Brent (BZ=F), that equates to monthly revenues around $1.05–$1.125 billion and annualized flows of $12.6–$13.5 billion. Projections show three broad scenarios. The status quo, with 500–700k bpd and maintenance-only capex, preserves the current revenue run-rate. A moderate recovery to roughly 1.5 million bpd could deliver close to $3.2 billion in monthly revenues but would require $5–10 billion in investment. The optimistic case imagines 3 million bpd of output with approximately $6.4 billion per month in revenues, needing $20–50 billion of upstream spending and at least 18–36 months of stable operating and political conditions. For the global market, even moving from 600k toward 1.5 million bpd would add nearly 900k bpd of heavy crude over time, a volume large enough to pressure heavy-sour differentials and put an additional cap on Brent (BZ=F) if demand growth stays muted.

Heavy crude constraints – extra-heavy Orinoco barrels need specialized refiners to move the Brent (BZ=F) needle

Venezuelan production is dominated by extra-heavy Orinoco crude with 8–12° API, which only a limited set of refineries in the U.S., India and China can process economically. That means the immediate impact is sharper in heavy-sour spreads than in the outright WTI (CL=F) and Brent (BZ=F) benchmarks. As more barrels reach refiners like Reliance under license, heavy grades such as Mars and the OPEC basket can see wider discounts versus Brent (BZ=F), while lighter grades remain relatively tighter. If Venezuela can push production closer to 1.5–2.0 million bpd over the next few years, that incremental supply will reinforce the global cushion: every additional 100,000 bpd of Orinoco crude gives the market more flexibility to absorb disruptions elsewhere without driving Brent (BZ=F) convincingly through $80.

U.S. policy pivot – green manufacturing cutbacks and a fossil-heavy stance support oil demand

The U.S. policy mix has tilted sharply back toward fossil fuels and away from aggressive cleantech build-out. Investment in cleantech manufacturing factories slid from about $50.3 billion in 2024 to roughly $41.9 billion in 2025, according to industry tracking. While companies announced around $24.1 billion in new cleantech manufacturing projects, roughly $22.7 billion of those were canceled as policy uncertainty and executive actions targeting renewables mounted. At least 10,000 green manufacturing jobs disappeared, part of a broader loss of 72,000 manufacturing jobs in 2025. At the same time, the administration is openly prioritizing fossil fuel expansion, with rhetoric centered around “drill” and “national energy emergency,” and an explicit rollback of wind and EV-friendly incentives. That combination slows EV adoption, keeps internal combustion vehicles on the road for longer, and sustains petroleum demand at the margin. For WTI (CL=F) and Brent (BZ=F), this policy environment raises the medium-term floor under demand, even as global agencies cut their growth forecasts.

Latin America’s growing weight – Argentina and Venezuela as twin supply levers in the Oil complex

The medium-term global supply map is shifting toward Latin America. Argentina is delivering light, tight shale crude and gas from Vaca Muerta with a $36 per barrel breakeven, scaling from 861,380 bpd total crude and 593,488 bpd of shale oil toward a 1 million boe/d target as YPF deploys $36 billion through 2030. Venezuela brings a different barrel – extra-heavy, high-sulfur crude – with current production at 500–700k bpd but theoretical upside into the 1.5–3.0 million bpd range, contingent on $28–65 billion in sectoral investment across upstream, refining and transport. Both flows operate largely outside the traditional OECD offshore growth story and sit on top of OPEC+ management. Together they create a structural cap for Oil, WTI (CL=F) and Brent (BZ=F): as long as prices hold above the low-to-mid 50s, capital keeps coming into Vaca Muerta and the supervised Venezuelan system, adding barrels that push back against any sustained rally into the 80s.

Rig count, inventories and demand – why the short-term risk bias for Oil is still mildly bearish

U.S. data show a flat overall rig count with oil-directed drilling slipping and gas-directed rigs taking more share, while recent inventory builds in crude and products highlight that supply is keeping up with, and at times outpacing, demand. Set that alongside IEA demand downgrades, Argentina’s ramp, the pathway for more Venezuelan barrels, and the weaker global manufacturing and cleantech capex numbers, and the near-term risk balance for WTI (CL=F) and Brent (BZ=F) leans mildly bearish. The market is more exposed to disappointing consumption or faster-than-expected sanctioned-barrel normalization than to a sudden, massive upside demand shock. On price levels, WTI (CL=F) strength into the $70–$75 zone and Brent (BZ=F) into $78–$82 looks more like an opportunity to fade than a setup to chase, while a deep flush into the mid-$50s on WTI (CL=F) and low-$60s on Brent (BZ=F) would start stressing higher-cost producers and forcing a more aggressive OPEC+ response.

Verdict on Oil, WTI (CL=F) and Brent (BZ=F) – Hold with a tactical bearish tilt and sell-the-rally logic

After folding in Mexico’s shrinking export role, Argentina’s record 861,380 bpd output and Vaca Muerta’s low-cost expansion path, Venezuela’s controlled but real revenue and supply normalization, and the U.S. policy shift away from cleantech toward fossil expansion, the conclusion is clear. At $62.89 for WTI (CL=F) and $67.75 for Brent (BZ=F), the market is sitting inside a reasonable equilibrium band where neither bulls nor bears have total control. The medium-term structure supports a $60–$70 core range for WTI (CL=F): demand is being propped up by policy and slower EV penetration, but supply is being reinforced by Vaca Muerta growth and potential Venezuelan recovery. The result is a Hold stance on Oil, WTI (CL=F) and Brent (BZ=F) with a tactical bearish bias. Rallies toward the upper 70s on WTI (CL=F) and low 80s on Brent (BZ=F) are best treated as sell or hedge levels, while only a capitulation move into the mid-50s, coupled with aggressive OPEC+ intervention or an upside demand surprise, would justify flipping to an outright Buy on crude.

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