U.S. Oil Surplus Predictions Soar: Impact on Global Markets

U.S. Forecasts Increased Global Oil Surplus for 2025 and 2026

The United States anticipates that global oil surpluses will surpass earlier expectations for the years 2025 and 2026. This projection is primarily driven by increased production from the U.S. and non-OPEC nations, coupled with an assessment that sanctions will not have a substantial impact on Russia’s oil output.

The U.S. Energy Information Administration (EIA) has indicated that global oil markets are likely to experience an average surplus of one million barrels per day (bpd) in 2026. This figure represents an upward revision from the prior estimate of an 800,000 bpd surplus reported last month. Notably, this new surplus projection is double that forecasted for the current year, which has also been adjusted upward following a recent review.

Production Growth and Market Response

These revised expectations are underpinned by forecasts suggesting robust oil production growth from both the U.S. and non-OPEC countries. Such increases in supply could pose challenges to OPEC+ plans aimed at resuming production levels this year. The EIA anticipates a significant rise in oil stocks if the coalition proceeds with planned production increases in April, as expected.

Impact of Sanctions on Russian Oil Output

The projections regarding increased surpluses lend further weight to the EIA’s assessment that sanctions imposed by the former Biden administration on Russian oil in January are unlikely to significantly impede the country’s production capabilities. Until recently, Russian oil supplies have shown little sign of decline.

In its report, the EIA explains, "Although the recent sanctions on Russia will lower its oil production to a limited extent compared to our previous expectations, the primary effect will be the alteration of global oil trade flows, which is not fully addressed in our current forecasts."

Future Uncertainties

Despite the current outlook, the EIA acknowledges the presence of uncertainties in oil prices, particularly due to the potential imposition of future tariffs and additional sanctions on Russia. These factors contribute to the unpredictable nature of the oil market moving forward.

This table summarizes the anticipated global oil surplus, highlighting significant revisions and projections that underscore the evolving landscape of oil production and market dynamics.