Global oil market oversupply will become more severe

The United States expects a larger oversupply in the oil market this year and 2026 than previously anticipated,mainly due to continued growth in US and non OPEC production,as well as the unlikely weakening of Russia’s production from sanctions.

The US Energy Information Administration(EIA)announced on Tuesday that it expects the world oil market to have an average surplus of 1 million barrels per day by 2026,higher than the 800000 barrels per day estimated in last month’s report.The latest forecast is twice the excess scale expected by EIA this year,and has also been raised compared to previous reports.

The increase in the scale of oversupply is due to the expectation that non OPEC and US oil production will be stronger than previously anticipated.The continuously growing supply may complicate OPEC+’s plan to restore idle production this year.The agency expects that if OPEC+increases production as planned in April 2025,oil inventories will begin to significantly increase.