LONDON (Realist English). Predictions of a major oil glut have so far failed to depress global prices, with Brent crude trading near $67 a barrel — unchanged since late June — despite warnings from international agencies and banks that oversupply could push prices to $50 or lower in 2026.
The International Energy Agency projects a record surplus of 3.3 million barrels per day (b/d) in 2026, while the US Energy Information Administration expects a surplus of 2.1 million b/d in the second half of this year and 1.7 million b/d in 2026. Consultancy Rystad has issued similar forecasts, warning of surpluses above 2 million b/d.
Analysts say the resilience of prices is partly explained by China’s large-scale stockpiling of crude for its strategic petroleum reserve. According to the IEA, Chinese purchases peaked at about 900,000 b/d earlier this year and remain close to 500,000 b/d. Unlike traditional hubs such as Cushing in the US or Rotterdam in Europe, Chinese storage volumes are less visible to markets, reducing downward pressure on prices.
“Instead of $67 a barrel, why are we not looking at $47 a barrel?” said Vikas Dwivedi, global energy strategist at Macquarie. He noted that excess supply has been absorbed in Asia rather than in closely monitored facilities.
The IEA also predicts slower demand growth of 700,000 b/d in 2026 — the weakest outside the pandemic since 2009 — against a projected supply increase of 2.1 million b/d. However, Opec+ members are unlikely to raise output as much as announced due to limited spare capacity.
Amrita Sen, founder of Energy Aspects, said Chinese stockpiling supports the market and reduces the risk of a price collapse. “Yes, there will be downward pressure, but as long as Beijing keeps buying and Opec+ capacity is constrained, the downside is limited,” she said.
Macquarie maintains that prices could “collapse rapidly” if surpluses begin to appear in visible storage hubs. For now, futures remain in backwardation, suggesting a still-tight market despite projections of oversupply.
