Much has been made about the apparent disconnect between the current global oil surplus on the one hand and inventories near decade lows at key pricing hubs on the other. Indeed, despite record volumes of oil piling up on water, benchmark crude oil prices eased only marginally in November, with North Sea Dated last trading at around $63/bbl and WTI at $59/bbl, with lower forward disincentivizing storage. Still, the market mb/d Demand/Supply Balance trends have clearly been affecting prices over time, with ICE Brent down by nearly $20/bbl since January.
Observed global oil stocks rose by 424 mb from January through November, or 1.3 mb/d on average. Notably, crude oil on water has surged by 213 mb since end-August, as sanctioned barrels struggled to find buyers, record long-haul shipments from the Americas to Asia boosted volumes in transit and exports from Stock Ch. & Misc (RHS) Demand Supply OPEC+ members in the Middle East rose on higher quotas and seasonally weaker regional demand. China’s crude stocks built by 58 mb from January to November while US gas liquids were up by 63 mb. But in stark contrast to the broader picture, crude and refined product stocks in key pricing hubs have seen only marginal builds.
These observed stock changes lag the near 2 mb/d build that our balances imply over the first three quarters of the year, and the 3.7 mb/d average surplus from 4Q25 through 2026. Much of the discrepancy is explained by the diverging trends in the different markets for crude, NGLs and oil products – with deteriorating market transparency further clouding the picture.
The projected global oil surplus in 4Q25 has narrowed since last month’s Report, as the relentless surge in global oil supply came to an abrupt halt. Notably, global oil supply in November was down by 610 kb/d from October and by a whopping 1.5 mb/d from September’s all-time high. OPEC+ accounted for 80% of the decline over the two-month period, reflecting significant unplanned outages in Kuwait and Kazakhstan, while output from sanctions-hit Russia and Venezuela contracted sharply. Russia’s total oil exports fell by roughly 400 kb/d in November to 6.9 mb/d, as buyers assessed the implications and risks associated with more stringent sanctions. As a result, Urals prices plunged by $8.2/bbl to $43.52/bbl, dragging export revenues to their lowest since Russia’s invasion of Ukraine in February 2022. By contrast, Iran’s oil loadings have continued apace at around 1.9 mb/d in recent months, but with Chinese independent refiners pausing buying amid exhausted import quotas, Iranian oil on water surged by 40 mb since August. For non-OPEC+ countries, the United States, Brazil and biofuels were the main contributors to the decline. Even so, global oil supply remains on track to rise by 3 mb/d in 2025 and a further 2.4 mb/d in 2026.
By comparison, world oil demand is forecast to increase by 830 kb/d this year and 860 kb/d in 2026. Recent strength in US gas liquids demand has been largely offset by persistent weakness in Europe and accelerated substitution away from oil in power generation in the Middle East. Nevertheless, refinery outages and impending EU restrictions on imports of products derived from Russian crude have combined to propel product cracks and refining margins to 3-year highs in November. While crude and NGL markets remain amply supplied, limited spare refining capacity outside of China available to process it, means we may well see parallel markets persist for some time to come.