Oil analysts say there is a supply glut — why that hasn't translated to lower prices this year

Coming into 2026, the statement presumption among lipid analysts was that the crude marketplace was entering a play of heavy oversupply, apt to support depressing prices passim the year. In 2025, lipid prices fell by astir 20% arsenic the glut widened.

Instead, lipid prices person seen an unexpected rally done the commencement of the twelvemonth connected a operation of geopolitical shocks and stronger-than-expected demand. Prices are present higher than they were six months ago, leaving traders "focused connected wherefore a ample planetary surplus ... has not translated into a sustained Brent terms diminution successful 2026 year-to-date," Goldman Sachs strategists wrote successful a enactment to clients.

But those 2 metrics don't needfully person to determination together, analysts told Yahoo Finance.

"My reasoning present is that those 2 things ... they could unrecorded together," Jorge León, the caput of geopolitical investigation astatine Rystad Energy, told Yahoo Finance.

Futures connected Brent crude (BZ=F), the planetary pricing benchmark, person gained astir 15% since the commencement of the year, portion those connected US benchmark West Texas Intermediate (WTI) crude (CL=F) are up a somewhat smaller 14%.

As of January, the International Energy Agency has estimated that the lipid marketplace would beryllium oversupplied by astir 3.7 cardinal barrels per time (bpd), what Macquarie analysts called an "extraordinary oversupply" successful a caller lawsuit note.

The Organization of the Petroleum Exporting Countries, oregon OPEC+, spent overmuch of 2025 unwinding accumulation cuts. In the Americas, US shale accumulation has remained astatine grounds volumes alongside maturation from different exporting nations successful the region, portion planetary request for hydrocarbons was expected to broadly diminution arsenic the satellite turned toward electrification and different forms of greenish energy.

But prices person risen anyhow arsenic traders person priced successful a assortment of unexpected proviso constraints and upticks successful request forecasts.

Sanctions from the US Treasury Department connected Rosneft and Lukoil, 2 of Russia's largest lipid producers, look to person taken astir 600,000 bpd disconnected the market, portion exports from the CPC pipeline, which runs betwixt the Caspian and Black seas, person dropped by astir 440,000 bpd to the lowest level successful astatine slightest 7 years aft drone strikes astatine the Black Sea-side exporting terminal.

At the aforesaid time, increasing prospects of subject enactment by the US against Iran person sent lipid prices surging connected the anticipation of disruptions to the Strait of Hormuz, a captious planetary chokepoint that sees astir 20 cardinal bpd of petroleum products transverse its waters. Attacks connected commercialized shipping successful the Red Sea person rerouted tanker postulation astir Africa's Cape of Good Hope, tightening carnal transportation markets and expanding freight costs for lipid products moving betwixt Europe and Asia.