New Delhi: Global oil supply is expected to exceed demand by 1.2 million barrels per day (b/d) in the second half of 2025, while annual demand growth is projected to be the weakest since 2001—excluding crisis years—at 870,000 b/d, according to S&P Global Commodity Insights.
The energy research firm also forecasts a surplus of 800,000 b/d for the full year 2026, driven by rising output from OPEC+ countries and continued weak demand.
“The underlying fundamentals of the global oil market remain profoundly unchanged. OPEC+ members are continuing with the accelerated unwinding of production cuts. There will be more oil supply coming from the Middle East in July. Meanwhile, global demand growth remains weak. In other words, there is plenty of oil available,” said Jim Burkhard, Vice President and Global Head of Crude Oil Research, S&P Global Commodity Insights.
According to the report, base case projections for Dated Brent crude oil prices are in the $50–60 per barrel range for the remainder of 2025 and into 2026. West Texas Intermediate (WTI) prices are expected to range between the upper $40s and upper $50s.
S&P Global expects the United States to register its first year-on-year oil production decline in nearly a decade. Total U.S. crude oil and condensate output, including offshore production, is forecast to decline by 600,000 b/d from mid-2025 to end-2026.
“The price of oil and Wall Street remain the de facto regulators of U.S. crude production. The onset of conflict in Iran briefly injected a fear premium into oil prices, and fresh uncertainties do remain. But the fundamentals are the fundamentals, and the oil price trend remains the same—downward,” Burkhard added.
OPEC+ countries have begun to visibly increase production in line with plans to accelerate the unwinding of earlier cuts. As of mid-June, Saudi Arabia’s crude and condensate exports had increased by nearly 700,000 b/d, reaching levels aligned with its monthly target.
The report notes that the Persian Gulf region still holds over 4 million b/d of spare production capacity. It also points to the uncertain possibility of additional Iranian supply coming to market if the ceasefire holds and sanctions are lifted or eased.
“A year or more into the future, could a focal point in the market be how much Iran could increase production rather than attempting to close the Strait of Hormuz or damage oil infrastructure in other countries? Perhaps. In the meantime, expect more oil supply from the Middle East, regardless,” said Ian Stewart, Associate Director at S&P Global Commodity Insights.
Despite the recent conflict and ceasefire between Israel and Iran, S&P Global noted that the trajectory of global oil markets remains unchanged, with supply expected to continue outpacing demand and price trends pointing downward.
