Global oil markets are entering a phase of softer fundamentals. With global growth projected at just 0.8% this year and next, and non-OPEC supply expanding by 1.5 million b/d, the balance leans toward oversupply. China, long the engine of crude demand growth, has shifted gears. Its crude imports reached 15.34 million b/d in 2023, but 2024 and 2025 have seen lower levels, breaking years of steady expansion. Even after filling an estimated 170 million barrels of storage this year, total imports are likely to fall. With demand modest and supply ample, oil prices around $65 look realistic. Yet OPEC’s stewardship remains decisive. The group has managed markets effectively in recent years and is positioned to steady prices if necessary.
A more resilient market, but with shifting dynamics
Geopolitical risk premiums, once a defining feature of oil markets, have diminished. Unlike past decades, today’s prices show less sensitivity to disruptions, a sign of greater resilience, even amid wars and sanctions. Uncertainty from tariffs and trade disputes dampened global growth in early 2025 but has since normalized. Meanwhile, the rise of the ‘dark fleet’ highlights inefficiencies in shipping but has limited wider trade impact. Secondary sanctions on China and India have proven ineffective, with both continuing to import Russian oil.