As we move toward the end of 2025, the global oil market is settling into a pattern unlike the supply shocks of past cycles. The key story is oversupply, not a sudden disruption. And while the headline price of crude may seem limited in its dynamics, the ripple effects across related markets are quietly materialising.
The supply-demand balance
The International Energy Agency (IEA) in its October report projects global oil supply growth of approximately 3.0 million barrels per day (mb/d) in 2025, raising its prior forecast of 2.7 mb/d (Argus Media, Reuters). Demand growth, by contrast, is expected to be around 0.7 mb/d for both 2025 and 2026, a sharp deceleration compared to historical trends (OilPrice.com, Reuters).
The result: an implied surplus of the order of 1.9 mb/d on average from Jan-Sept 2025, with potential to widen to ~4 mb/d in 2026 (hydrocarbonengineering.com).
The U.S. Energy Information Administration (EIA) concurs: it forecasts Brent crude averaging around US$62/barrel in Q4 2025, with inventories expected to rise further (U.S. Energy Information Administration).
Thus, the fundamental outlook for the rest of the year: a well-supplied market, minimal spare-capacity constraints, and downward price pressure rather than upside surprise.
What happens beyond crude? The hidden stress points
Because the excess supply is becoming the structural norm, the more significant consequences are appearing in related markets, not just the crude price.
- Refining and petrochemicals: With global demand growth modest, refiners face weaker margins on products. The IEA notes that refining runs will rise modestly but struggles in product cracks may emerge. A consequence: refining companies may face margin compression even if crude stays flat.
- Inventories, freight and storage: The IEA points to inventories nearing four-year highs (OECD + non-OECD) and rising “oil on water” (floating storage) in September. That means logistics and shipping costs may rise even when spot crude is stable, pushing volatility into the supply-chain side rather than the price per barrel.
- Upstream / liquids supply growth: The EIA reports U.S. crude production for 2025 to hit record highs (≈13.5 mb/d) and growing output in Brazil, Canada, Guyana. The knock-on: more competition among barrel producers, lower pricing power, and upward pressure on break-even thresholds.
- Emerging market importers: A side-effect of lower crude prices (or rather, stable but non-rising) is modest relief for net-importing economies. With lower energy input cost, inflationary pressure may ease. Thus, in a round-about way, a heavy oil market may benefit some EM external balances.
Correlations and systemic links
Analysts should monitor how oil’s structure influences other asset classes and commodity sectors:
- Oil ↔ Inflation / FX: With crude growth no longer a strong inflation catalyst, the relationship between oil prices and inflation expectations is weakening. Policymakers might treat oil as less of a wild card, which could reduce inflation hedging demand.
- Oil ↔ Shipping / freight indices: Rising inventories and more barrels at sea mean freight markets may decouple from crude strength. Elevated shipping rates could persist even in a soft crude price environment.
- Oil ↔ Energy equities: With margins under pressure in refining and slower growth in production, investors may favour low-cost extraction companies with stable dividends rather than high-growth upstream names. A flattening crude price environment may thus reshape sectoral valuation.
Risks and caveats
Even a oversupply scenario carries risks:
- A supply disruption (geopolitical, natural-disaster, infrastructure) could trigger a price jump precisely because the market has grown complacent.
- If demand unexpectedly strengthens (for example via stimulus or rebound) the surplus could shrink faster than expected.
- Inventory mis-measurement or regional bottlenecks (e.g., product surpluses in one region, tightness in another) may distort the global picture; the IEA notes uncertainty about where the building barrels are located.
Forecast to year-end 2025
Based on the data:
- Brent crude is likely to remain in a range of US$60-70/barrel, with modest downside pressure due to inventory builds.
- Refining margins and downstream product spreads may show more weakness than crude itself.
- Freight and inventory/warehousing indicators may become leading signals for market stress.
- Net-importing nations may benefit from lower energy-cost headwinds, which could feed into softer inflation tails.
Conclusion
In today’s oil market the absence of a price explosion should itself be viewed as significant. Rather than waiting for a volatile spike, the challenge for investors and markets is recognising that stability in crude masks fragility in the ecosystem. The heavy barrel may not blow up the top-line price, but it is quietly weighing on margins, logistics, and derivative links. The real opportunity lies not in predicting the next big oil-shock, but in understanding where the ripple-effects land.
Sources :
- Agence internationale de l’énergie (AIE) : Oil Market Report, octobre 2025
- AIE : Oil 2025 : Analysis and Forecast to 2030
- AIE : As oil market surplus keeps rising, something’s got to give (commentaire)
- OPEP : Monthly Oil Market Report, octobre 2025
- U.S. Energy Information Administration (EIA) : Short-Term Energy Outlook, octobre 2025
- EIA : Petroleum Supply Monthly & Drilling Productivity Report, sept.–oct. 2025
- Banque mondiale : Commodity Markets Outlook, octobre 2025 : Energy Transition Pressures and Oil Supply Response
- OCDE Data Portal – Croissance du PIB, inflation et balances énergétiques (Q3-Q4 2025)
- Reuters, 7 oct. 2025 : EIA hikes U.S. oil output forecast, warns oversupply will slash prices
- Reuters, 16 oct. 2025 : Where are the oil barrels? IEA gap deepens confusion over looming glut
- Reuters, 25 oct. 2025 : Global inventories hit four-year high as floating storage rises in Asia
- Argus Media, oct. 2025 : IEA hikes 2025-26 global oil supply growth forecast; demand slows
- OilPrice.com, oct. 2025 : IEA warns of larger oil glut than expected
- Hydrocarbon Engineering, 29 oct. 2025 : Projected oil surplus of nearly 4 million bpd in 2026 and slowing demand
- Oil & Gas Journal, oct. 2025 : IEA: Global oil market to see huge oversupply
- Bloomberg Energy Outlook, nov. 2025 : Global oil price forecast remains stable as inventories build, OPEC+ output rises
- Financial Times, oct. 2025 : Oil market calm hides rising stress in products and freight
- Platts / S&P Global Commodities, oct. 2025 : Petrochemical feedstock demand softens amid stable crude
- FMI : World Economic Outlook Update, oct. 2025
- Organisation mondiale du commerce (OMC) : Trade Outlook Q4 2025