Oil prices have stayed stronger than expected despite economic headwinds

Tariffs are starting to weigh on investment, consumption, and growth, while OPEC+ has scope to add over two million b/d Yet, the anticipated oversupply has not emerged. Merchandise trade volumes have been resilient, and net OPEC+ supply actually fell between March and August. But looking ahead, easing Middle Eastern summer crude burn will free up exports, likely creating a surplus in Q4. Combined with slowing economic activity, this could weigh on front-end prices.

Europe’s LNG commitments

A recent deal suggested Europe should triple U.S. energy imports within three years, an outcome unlikely in practice. Governments cannot compel commercial buyers, and the U.S. cannot divert such volumes entirely to Europe. Europe will increase U.S. LNG purchases as it phases out Russian energy and may take more middle distillates as domestic refineries shut, but a tripling of imports is unrealistic.

Iran and OPEC market share

Iranian oil flows to China continue, with only marginal shifts in transfer routes from Malaysia to Indonesia, raising costs but not reducing overall volumes. Meanwhile, core Middle East producers have halted market share losses to Russia, in China and India. Exports are stabilizing and set to rise in Q4. This strategy helps them regain Asian market share and demonstrates capacity ahead of the 2026–27 OPEC+ quota negotiations, where baseline production levels will be key.