Surplus alert for OIL: Opec Plus is not going to deal with a blooming period.

2025 has not been a particularly prosperous year for OPEC+ countries. As a result, oil is experiencing its worst period since 2020. Due to a strong supply surplus, Brent crude prices have fallen by 18% this year.

The International Energy Agency (IEA) has stated that a significant oil surplus is expected in 2026. This forecast is driven by increased production from non-OPEC countries such as the United States, Argentina, Brazil, and Guyana, which is expected to exceed global demand.

Nevertheless, oil prices are projected to remain between $50 and $70 per barrel.

In addition, the American Petroleum Institute (API) reported that U.S. crude oil inventories increased by 1.7 million barrels last week. From an economic perspective, this situation has helped reduce inflationary pressures, benefiting central banks. However, OPEC+ countries have faced growing challenges.

The tense geopolitical situation has not contributed positively to this scenario. Venezuela has been forced to shut down some of its oil wells. Moreover, Ukraine has attacked several Russian oil infrastructures, including facilities connected to Kazakhstan. Finally, rare public tensions have emerged in the relationship between Saudi Arabia, the group’s leader, and its neighbour, the United Arab Emirates, particularly regarding the conflict in Yemen.

To address this situation, OPEC+ countries will hold an online meeting on January 4th. The main goal will be to pause supply hikes by changing its strategy.

Benedetta Zimone