The expanding oil glut is placing significant downward pressure on energy stocks in 2026, as global production outpaces consumption www.worldbank.org . Major oil-producing nations have struggled to coordinate effective supply cuts, leading to a persistent surplus in the market www.worldbank.org .

Margin Compression

Energy companies are facing margin compression as crude prices fall, forcing many to delay capital expenditures and focus on cost-cutting measures to maintain profitability in a challenging pricing environment www.worldbank.org .