We're drowning in oil.
The global oil market is currently facing a significant oversupply, a situation that has put downward pressure on crude oil prices and generated concern among producers and analysts. By February 2026, this phenomenon has solidified as one of the main challenges facing the energy sector.
According to reports from the International Energy Agency (IEA) and the U.S. Energy Information Administration (EIA), global oil production clearly exceeded demand during 2025 and continues to do so in 2026. Global supply grew sharply thanks to increased non-OPEC+ production, especially in the United States (with its shale oil at record levels), Brazil, Guyana, and Canada, coupled with the gradual easing of production cuts by OPEC+. Meanwhile, demand has grown at a much slower pace than expected: an increase of only around 0.8–1.2 million barrels per day (mb/d) annually is estimated, impacted by the energy transition, the mass adoption of electric vehicles (especially in China), reduced economic activity in several regions, and improved energy efficiency.
This imbalance has generated an estimated surplus of between 2.3 and 4 million barrels per day in 2026, depending on the source. The IEA projects a peak surplus of around 4 mb/d in some quarters, while the EIA anticipates inventory builds of more than 3 mb/d on average. As a result, global inventories have swelled considerably: in 2025 they grew at the fastest rate since the 2020 pandemic, with reserves in OECD countries exceeding historical averages and oil "floating" on tankers.
The impact on prices has been clear. Brent crude averaged around $68-70 per barrel in February 2026 (after fluctuations due to geopolitical tensions such as those related to Iran and Russia), but most projections point to a decline to an average of $58-62 for the entire year, and even lower according to Goldman Sachs and the EIA (to $56-58). This oversupply has largely offset geopolitical risk premiums, keeping prices low and limiting sustained increases.
For producers, especially in OPEC+, this scenario complicates quota management and creates pressure for potential further production cuts. Oil-dependent countries face lower tax revenues, while for consumers and refiners (such as in the US) it represents an advantage with cheaper crude and attractive refining margins.
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