Fitch Ratings‘ “neutral” 2026 outlook for the global Oil and Gas sector reflects its assumption that the Brent oil price will average about $63/barrel, down from $69/barrel in 2025, with geopolitical risks supporting prices while large oversupply constrains them, Fitch said in a report published Dec. 12.
The oil market will remain oversupplied as supply growth will continue to outpace demand growth in 2026. The International Energy Agency projects world supply increasing by 2.5 million barrels a day (mb/d), split between non-OPEC+ (about 1.2 mb/d from the US, Brazil, Canada, Guyana, and Argentina) and OPEC+ (about 1.3 mb/d under current agreements). Demand growth remains subdued by weak macro trends, accelerating transport electrification and a weak petrochemical sector.
Refining margins remain robust amid capacity disruptions and Fitch expects them to remain constructive in 2026, though regional differences persist. LNG supply will expand in 2026, driving European gas prices down, but keeping US gas prices firm.
Oil and gas companies enter 2026 with strong balance sheets and disciplined capex focused on short-cycle oil, selective LNG and targeted lowcarbon projects. Fitch projects global median EBITDA net leverage to remain largely flat in 2026, with FCF margins improving against 2025 on cost and capex discipline.
Fitch expects median EBITDA net leverage in APAC to rise to 1.3x from 0.9x in 2025 amid high capex and lower prices, with Chinese national oil companies and Australian LNG firms retaining ample buffers. EBITDA Net leverage will rise for most Southeast Asian and Indian upstream producers as energy security needs keep capex intensity high, while Indian downstream leverage should improve on steady refining margins and improved market margins.
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