Dear Merchants,
We need to talk about what’s coming.
While we were celebrating New Year’s Eve, Ukrainian drones were destroying Russian refineries. While champagne corks popped in Manhattan, CIA operatives were conducting strikes on Venezuelan oil facilities and while most investors slept off their hangovers on January 1st, oil markets opened 2026 staring into an abyss the worst annual performance since the pandemic collapse, 3 consecutive years of losses for Brent crude, and a structural oversupply crisis that makes 2020 look like a warm up act.
Let me be direct, if you think 2026 is just another year in oil markets, you’re not paying attention.
This is a year of reckoning where oversupply meets geopolitical chaos, where inventory mathematics collides with Middle Eastern realpolitik, and where the decisions you make in the next 60 days will determine whether you capture generational opportunities or get crushed by the capitulation.
So let’s start 2026 with a forecast of the oil market that connects every thread because nothing in this market exists in isolation anymore.
Brent crude opened January 2nd trading between $60.34 and $61.27 per barrel. West Texas Intermediate hovered near $57.30 to $57.84.
Both benchmarks hemorrhaged 20% of their value in 2025, marking the steepest decline in six years. For Brent, this was the 3rd consecutive annual loss, a streak unprecedented in the benchmark’s entire trading history.
Think about what that means psychologically. The market isn’t just oversupplied it’s traumatized. Every rally gets sold. Every geopolitical spark ignites hope, then fizzles into disappointment. Traders have been conditioned to expect failure, and that conditioning matters because it creates the very volatility we’ll exploit in the months ahead.
Some energy analysts captured the consensus perfectly when he called 2026 “a fairly boring year for oil prices, range bound around $60-65 a barrel,” with Q1 expected to be “weak fundamentally.” But here’s what are missing: boring markets create extraordinary opportunities for those who understand the inflection points hidden beneath the surface noise.
Let’s talk numbers, because this is where everything connects.
