Global oil markets are sliding into a major oversupply as production surges from both new and established exporters, reports Bloomberg. Rapid growth in countries like Guyana, alongside rising output from OPEC+, the US, Brazil, and sanctioned producers such as Russia and Iran, has pushed record volumes of crude onto the world’s oceans. As supply outpaces demand, oil prices have fallen sharply, benefiting consumers through lower fuel costs but putting pressure on producer nations and energy companies. While geopolitical risks remain volatile, most traders expect the glut to persist into 2026, keeping prices subdued. They write:
Almost every day, an oil tanker arrives off the coast of Guyana to pick up a cargo that could reach a buyer practically anywhere on the planet. The stream of shipments is all the more remarkable because just a few years ago, the country didn’t pump a single barrel.
On the other side of the globe at ports in the United Arab Emirates, which has been exporting since the 1960s, there’s also a constant flow of vessels pulling in to load oil. OPEC’s third-largest producer sent the most crude overseas in years last month.
Together, the two countries offer some of the clearest signs of an oil market facing a major glut. Old and new producers alike are ramping up output as sanctioned barrels from Russia search for buyers, putting a record 1.3 billion barrels of crude on the world’s oceans. […]
Global benchmark Brent crude is down 20% this year to trade near $60 a barrel. Trafigura, one of the world’s top commodities traders, says oil could be in the $50s through the middle of the year before recovering into the end of 2026.
“It’s a market where everybody agrees what’s going on,” Ben Luckock, global head of oil at the firm, said in an interview. “Prices should be lower, but they can’t be because there’s a war going on in Ukraine still.” […]
In Venezuela, volumes were heading for their biggest year since 2019 prior to the recent US blockade and Russia just shipped the most oil in a week since it invaded Ukraine. […]
If the slide in crude prices continues, it would ultimately put a dent in inflation. A $10 drop in the oil price could shave 0.2 percentage points from the consumer price index in the US, South Korea and Japan next year, according to Bloomberg Economics. […]
But as 2026 gets going and production continues to ramp up, most in the market see a wall of supply on the way.
“I’ve never seen a consensus as large as what we’ve seen, I would say the last three, four months on the balances,” Kjus said. “It’s like an iceberg floating against us.”
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