While official quotas have increased by about 2.5mbd since April, actual exports have only risen by roughly one million. At the same time, refined product exports have declined by a similar volume. This isn’t coincidence, it’s calibration. By easing crude into the market while pulling back products, OPEC+ is sustaining refining margins and stabilizing prices.
Weak global demand limiting panic around spare capacity
From 2010 to 2019, oil demand grew steadily by about 1.5mbd annually, driven largely by China. If that trajectory had continued, today’s slim buffer would have sent prices soaring past $100. Instead, slowing demand has eased market tension. In the US, shale has matured from a boom industry into what I call a “slow-moving whale.” Production remains flat, new wells merely offsetting natural declines, while blending constraints restrict growth due to limited heavy crude imports from Canada, Mexico, and Venezuela. This structural stagnation means no price collapse, but no explosive rallies either. Meanwhile, Indian refiners are proving agile, adapting feedstock mixes ahead of potential sanctions and seizing arbitrage opportunities. Together, these shifts show a market entering a phase of managed moderation, where strategy, not speed, defines success.