There’s been stronger-than-expected demand in the US where gasoline consumption has stayed robust beyond the summer driving season, while stock levels are lower than last year. Europe, though grappling with economic challenges and Russian threats, continues to hold up better than many predicted. In Asia, India is absorbing more Russian crude while China is stockpiling, buying both Russian and U.S. barrels. On the supply side, growth is not fully materializing as announced. OPEC+ members such as Iraq have added production, but actual increases remain below targets. Meanwhile, the US is on track to reach record output of up to 13.7 million b/d by year-end, while Brazil and Guyana are expanding.
Sanctions, Geopolitics, and Market Stability
Renewed sanctions on Iran and ongoing efforts to constrain Russia highlight the limits of enforcement in today’s energy world. China and India continue to buy sanctioned crude, often through intermediaries, prioritizing national interests over compliance. Attempts at a total Iranian export ban would risk surging prices, an outcome politically unacceptable in Washington. But while sanctions remain porous, geopolitical risks, such as drone strikes on Russian export terminals, pose genuine threats to supply. Still, while short-term turbulence is inevitable, I remain confident in the system’s resilience and its ability to restore balance.