The global energy market is on the verge of a massive oversupply, which inevitably pushes down prices for "black gold." Currently, a record 1.3 billion barrels of crude oil are in transit or awaiting buyers in the world's oceans. This is stated in a Bloomberg article, writes UNN.
Details
As old and new players increase production, analysts predict that by mid-2026, the price of a barrel of Brent crude could fall to $50.
Global Fleet and New Production Leaders
The main drivers of the market surplus have been both unexpected newcomers and experienced exporters. Guyana, which did not produce oil a few years ago, now receives tankers daily off its coast.
At the same time, the UAE shipped record volumes of raw materials in recent years. Barrels from Russia are added to the general flow, as it is forced to seek buyers in India and China under sanctions pressure, offering the largest discounts since 2023. According to the International Energy Agency, in 2026, production could exceed consumption by a record 3.8 million barrels per day.
Political Dividends and Economic Risks
For consumers and politicians, including US President Donald Trump, falling prices are a positive signal that helps fight inflation. In the United States, gasoline prices have already fallen below $3 per gallon for the first time in three years.
However, for exporting countries such as Saudi Arabia and Russia, cheap oil becomes a direct threat to national budgets. Saudi Arabia needs a price of about $90 to break even, and some OPEC+ members need more than $100.
This is a market where everyone agrees on what is happening. Prices should be lower, but they cannot be lower because the war in Ukraine is still ongoing
War and Sanctions as a Deterrent
Despite the obvious oversupply, the market remains extremely sensitive to geopolitical instability. The war in Ukraine and tensions around Venezuela keep prices from an immediate plunge. Experts emphasize that if sanctions against Russia are eased as a result of peace agreements, the market will be flooded with even more Russian barrels. However, for now, the key factor remains the pace of supply growth in America, Brazil, and Canada, which significantly outpaces uneven global consumption.