A major oil trader has warned of a "super surplus" of crude in 2026

The global oil market is expecting a "super surplus" next year due to the fact that the expanded supply will collide with the weakness of the world economy. This was warned by Saad Rahim, senior economist at Trafigura, one of the world's largest traders, as quoted by the Financial Times.

New drilling projects and slowing demand growth are likely to have a negative impact on crude oil prices next year, Rahim predicted. Several major projects are expected to come online in 2026, including in Brazil and Guyana, the FT noted. "Whether it's oversupply or super oversupply, it's hard to avoid that," the economist opined.

Demand from China, which is now the world's largest importer, is expected to grow more slowly next year due to the huge fleet of electric cars, which has sharply reduced the need for gasoline, the FT also writes. And replenishing strategic reserves Beijing has been busy as early as 2025 due to lower prices.

"China needs to keep buying [oil] at the current pace so that this 'super surplus' doesn't come even sooner," Rahim warned.

The US is also keen to keep oil prices lower, with President Donald Trump intent on increasing US crude production under the slogan "storms, baby, storms", the FT added.

The cost of contracts for delivery of Brent oil with execution in February declined by about 1% at the auction on December 9 - fell below $62 per barrel, follows from the data of the Intercontinental Exchange. Quotes of U.S. oil WTI were losing about 1.1%.

Brent oil has fallen 16% this year: 2025 could be the worst year for the market in five years, the FT noted. Ben Lacock, head of oil trading at Trafigura, predicted in October that oil prices could fall below $60 a barrel before rising again. "I think we'll go below $60 at some point around Christmas and New Year," he said (quoted by the FT).

The cost of oil at the end of 2025 is influenced by fears of a glut, negotiations on a peace deal between Russia and Ukraine that the United States is trying to organize, and expectations of an interest rate decision by the U.S. Federal Reserve, Reuters writes. "Many in the market do not believe that Russia is serious about a peace deal and that they [in Moscow] are just buying time," said Andrew Lipow, president of Lipow Oil Associates, in the agency's statement.

"The next [market] driver is likely to be the December IEA (International Energy Agency. - Oninvest) report to be released on December 11, which will show a record oil market glut in 2026," said OANDA senior market analyst Kelvin Wong (quoted by Reuters).

This article was AI-translated and verified by a human editor