The macro stars are aligned for an oil price crash to $20 Brent in 2026

The end game? An oil price crash to $30 if we are lucky and to $20 if we are not. Goldman’s price target is $50 but J.P. Morgan’s oil eggheads predict $30. Oil went as low as $6 in 1986 but I was…by Matein Khalid

Life is lived forward but only understood backwards. So are crude oil price cycles. I finally grasp now that I only ever made real money when oil prices crashed with a vengeance, not when they rose in a glacial cadance. My first real oil price crash windfall was in 1999, when Brent plunged to $10 a barrel in the aftermath of the Asian currency meltdown, Russia’s ruble default and the anti-Chinese riots in Java whose endgame was the fall of the 34-year old Suharto military regime in Indonesia. This was the year of living dangerously with leverage in WTI futures on the Merc.

My next big oil price crash moment came when the Wall Street credit bubble went ballistic in the summer of 2008 as Brent traded at $148. Six months later, after Lehman’s failure and the subprime, CDO systemic trauma in the capital markets, Brent had fallen a ghastly $120 a barrel to barely $30 before Saudi Arabia was forced to engineer the largest output cut in the history of OPEC, an epic 4-MBD to avert doom on Planet Black Gold.

The oil price crash wiped out an entire generation of property speculators in the Gulf as I had warned ad nauseum in the media that this scenario was inevitable. Yet there are none so blind as those who refuse to see and a fool and his money are parted long before his money reaches the Union Bank of Switzerland, which itself wiped out its own capital with $55 billion in losses, not bad for the Swiss megabank whose tagline calls it the world’s leading wealth manager, except when it comes to its own bank capital, when it was obviously the planet’s biggest circus of Fools und Fondue.

The Ali Al-Naimi crash happened in the summer of 2014 when Brent was $115 and Goldman predicted that it was headed to $250 after the terrorist of the ISIS “caliphate” seized Mosul from two divisions of the Iraqi Army. Yet Ali Al-Naimi told the world that Saudi would not defend $100 or even $90 Brent at an OPEC conclave in Vienna, thus giving me a free hunting license to short Brent up the wazoo. Brent collapsed from $115 to $28 in this oil price crash and took GCC equities assets with it. We lived life forward in real time but the cash register only went ka-ching once the short Brent trade morphed from a snowball to an avalanche in the bottomline. Ali Al-Naimi did not put the Texan shale oil wildcatters out of business but gifted my tribe of energy traders a totally undeserved small fortune in profit on our short positions.

The MBS era in Saudi Arabia has coincided with two major oil price crashes, the frist after a 2019 spat with the Kremlin on output cuts in OPEC and the second due to the Covid pandemic, which saw Brent plummet to $20 a barrel in the wet barrel market and WTI actually turned negative as cushing storage hub ran out of capacity, making deliveries on WTI futures contracts impossible. Warren Buffet snapped up OXY below $10 and so did I. The oracle of Omaha is like the ancient Greek oracles of Delphi. You just do not defy the odds and the gods by messing around with these oracles. Where is my Greek oracle now, that it is no longer age appropriate for me to hang around at my beloved Scandinavian love shack in Ayia Napa LOL. If only the clock could turn backwards and I could revisit those cubic white marble temples to memory in the Cyclades amid the silver olive groves and the mist shrouded morning of creation!

We have been in a slow motion oil price crash ever since Putin invaded Ukraine and Brent peaked at $130 in the summer of 2022. We started 2025 at $82 on Brent and have now tanked to $63 even though high tech wars rage in Ukraine, Lebanon, the Red Sea, Gaza, Iran, Sudan, Syria and Libya. The anatomy of the next oil price crash to $20 Brent is staring at us in the face. The IEA estimates a 4-MBD supply glut next year and there is simply no space to put the one billion barrels in floating inventory roaming around the world in the cargo holds of supertankers. Distressed barrels of Russian crude can be snapped up at $25 a barrel from Moscow’s dark fleet.

Chinese demand for crude/distillates never really recovered from the collapse of the largest debt financed property bubble in the history of the Dragon Empire and the history of capitalism itself. Non-OPEC output could surge by 2-MBD as elephant gushers gush the black goo from Guyana, Brazil (the next Kuwait with a 4-MBD OPEC quota by 2028), Canada and the Permian Basin shale cowboys. OPEC’s pause on its output release has triggered a $1 rise in Brent to $63 but this is just short covering as the smart money is still short in the Merc and the oil trading bazaars of Rotterdam, Oslo, London, Dubai and Singapore.

Venezuela has the biggest oil reserves in the world and the Gulf coast refinery network plus Aruba/Curacao were built to process Bolivar Light. Trump does not need to send the Gerald Ford’s carrier strike force squadrons of stealth bombers, flotillas of guided missile destroyers and a wolf-packs of hunter killer nuclear submarines just to blast a bunch of hairy narco traficantes in Rivas speedboats out of the water. Make no mistake, this is regime change in an oil war. Exactly like Mossadegh coup in 1953 Iran, Saddam’s Iraq in 2003, Gadaffi’s Libya in 2012 and Imran “Taliban” Khan in Pakistan in 2022. When Maduro retires to join his buddy Assad in Moscow, Big Oil will move in pronto, as Chevron has done. Venezuela will flood global markets with 2-MBD of Maracaibo Basin crude amid the mother of all supply gluts. The end game? An oil price crash to $30 if we are lucky and to $20 if we are not. Goldman’s price target is $50 but J.P. Morgan’s oil eggheads predict $30. Oil went as low as $6 in 1986 but I was in Wharton and lost the tuition money Dad had sent me in the silver futures. This time I am locked, loaded and ready for the kill. Get shorty hombres as we sing the hymn Onward Christine Soldiers! Viva Jefe Trumpo!

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