The amount of oil on tankers in transit has surged to the highest since 2016, signaling oversupply. China is building more oil tanks to boost inventories, conflicting with the surplus narrative. Vortexa data shows 1.2 billion barrels of crude at sea, driven by higher production but also indicating weak demand.

China is absorbing much of the oil oversupply, hoarding barrels since the beginning of 2025. State-owned energy giants are constructing 11 new oil storage sites, adding 169 million barrels of capacity by 2026. China’s stockpiling raises questions about the motivation behind accumulating oil amid abundant supply and low prices.

Despite an abundance of oil at sea, concerns arise over spare production capacity. U.S. shale growth is slowing, while OPEC+ struggles to meet production hike targets, potentially limiting the ability to respond to a demand surge. The market remains sensitive to supply security, with traders reacting to sanctions on Russia’s energy industry.

Ongoing reports suggest a complex oil market dynamics. While oil at sea implies surplus, factors like spare capacity and geopolitical tensions contribute to price volatility. Traders’ reactions to supply security concerns indicate uncertainty in the market, challenging the narrative of a clear-cut oversupply scenario.

Read more at Yahoo Finance: Oil Tankers Jam Seas as Global Glut Builds