Crude Oil Glut Looms: Top Commodity Traders Predict Price Pressure

Crude Oil Glut Looms: Top Commodity Traders Predict Price Pressure

Multiple sources from the world’s top commodity traders indicate that long-anticipated signs of a crude oil surplus are finally emerging, potentially exerting downward pressure on oil prices.

Since the end of last month, Brent crude prices have fallen by 11%. This is attributed to the sustained supply of substantial volumes of oil to the market by OPEC+, as well as countries outside the organization. A prevailing belief now exists that the crude oil market faces a glut.

Forward curves, used by traders to gauge market strength, also reveal bearish expectations for the U.S. crude oil market next year.

“The market seems to be entering a slightly different phase now,” Torbjorn Tornqvist, CEO of Gunvor Group, said in an interview in London. “We’ve heard it before, and a lot of people have lost money on it. But this time, at this stage, I think there’s more substance to the ‘oversupply’ claim.”

Earlier in the day, the International Energy Agency (IEA), based in Paris, stated that the daily crude oil surplus in 2026 would be approximately 4 million barrels, 18% higher than forecasts from a month prior.

Tornqvist, along with executives from Vitol Group and Trafigura Group, indicated at the Energy Intelligence Forum that they expect oil prices to decline in the short term, before rebounding next year. These three oil trading giants handle millions of barrels of crude oil daily.

“Over the last 12 months, we’ve gradually woken up to the fact that a surplus is coming,” said Ben Luckock, head of oil at Trafigura, at the forum event in London. “The reality may be that oil prices will go down further from here.”

Russell Hardy, CEO of Vitol Group, said that the average crude oil price next year would likely be around $60 per barrel.

Trader Predictions for Oil Prices Next Year:

• Vitol: Increased price pressure at year-end; average price of $60 per barrel next year.
• Gunvor: Decline first, then back to $62 per barrel.
• Trafigura: Fall to around $50 per barrel by year-end, then rebound; reaching around $60 by this time next year.

While hardly a “crash,” this would still represent a roughly 14% decrease from the 2025 average to date – a decidedly disappointing outcome for oil majors heavily reliant on crude oil prices for profits.

“More crude is coming to the market in the second half of this year: OPEC production steadily increasing, plus non-OPEC production from countries like Guyana, Norway (small increases), and Brazil (small increases),” Hardy explained.

However, he also pointed to a few reasons not to be overly bearish: The market may be overestimating Venezuela and Iran’s (both under sanctions) ability to maintain crude oil production next year; global refineries are running at full capacity to meet demand; and lower oil prices could stifle U.S. shale oil production.

In an interview, Tornqvist said that while crude oil futures prices should decline, the market is unlikely to enter into what is known as “supercontango” – a state in which commodity storage businesses can generate substantial profits.

“There’s a lot of crude flowing into the market at the moment, but demand for crude hasn’t increased accordingly,” he said. “In addition to that, trade tensions are clearly escalating again.”