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The oil market has been in surplus since the start of the year, but stock builds have so far been concentrated in crude in China and gas liquids in the United States. By September, however, a surge in Middle East production, coinciding with seasonally lower regional crude demand, boosted exports to two and a half-year highs. This, combined with robust flows from the Americas, swelled oil on water in September by a massive 102 mb, equivalent to 3.4 mb/d, the largest increase since the Covid-19 pandemic. Brent crude oil futures rose by an average $0.30/bbl to $67.60/bbl m-o-m in September. But by early October, the wave of tankers at sea and the announcement of new trade measures pushed prices down by $4/bbl to $64/bbl at the time of writing.

Global oil supply in September was up by a massive 5.6 mb/d compared with a year ago. OPEC+ accounted for 3.1 mb/d of the increase, as the Group of 8 unwound 2 mb/d of production cuts, and as Libya, Venezuela and Nigeria all posted strong gains. Based on their latest agreement, OPEC+ is now on track to lift output by 1.4 mb/d on average this year and by a further 1.2 mb/d in 2026. Non-OPEC+ producers are set to add 1.6 mb/d and 1.2 mb/d, respectively, over the same timeframe, with the United States, Brazil, Canada, Guyana and Argentina leading growth. Risks to the forecast remain, with sanctions imposed on Russia and Iran compounding geopolitical concerns. Persistent attacks on Russian energy infrastructure have cut Russian crude processing by an estimated 500 kb/d, resulting in domestic fuel shortages and lower product exports. The drop in Russian middle distillate exports reverberated globally as regular buyers scrambled to secure alternative supplies, bidding up diesel and jet fuel cracks in the process. Light sweet crude refining margins hit two-year highs in Europe and 18-month highs on the US Gulf Coast and in Singapore in September.

As for global oil demand, the third quarter of 2025 saw growth rebound to 750 kb/d y-o-y from the second quarter’s 420 kb/d pace, when consumption was weighed down by tariff turmoil, especially for LPG/ethane feedstocks that posted a rare contraction. Third-quarter gains are largely in line with our annual growth forecast of around 700 kb/d in both 2025 and 2026. Despite recent sluggish growth, the petrochemical sector will reassume its position in the driving seat of oil demand growth, as subpar economic conditions, increasing vehicle efficiencies and strong EV sales make for strong headwinds for road transport fuels.

Amid the backdrop of slower demand growth and a rapid increase in crude supplies, global oil balances have seen a 1.9 mb/d surplus since the start of the year, yet crude prices have fluctuated around $70/bbl so far in 2025. That range has been kept in check in part because NGLs dominated the overhang from April through August. Indeed, outside of China, the crude market tightened over the same period. Looking ahead, as the significant volumes of crude oil on water move onshore to major oil hubs, crude stocks look set to surge while NGLs start to drop. However, the loss of Russian product supplies, upcoming EU restrictions on product imports derived from Russian feedstocks, and recent refinery capacity closures may keep the product markets tighter than the overall balance would suggest.