The oil market is preparing for a significant oversupply, expected to depress prices at the end of this year and early next year. Estimates of the glut size vary, with the International Energy Agency warning of a larger oversupply than previously anticipated due to increased supply and decreased demand.

The United States sanctioned Russia’s top oil producers, Rosneft and Lukoil, impacting global trade flows. Despite the sanctions, global oil glut is expected to rise significantly, leading to a forecasted drop in Brent crude oil prices next year.

OPEC+ producers have decided to pause their production cuts reversal due to the expected surplus in the market. This decision, coupled with uncertainty from the Russian oil sanctions, may lead to a rethinking of production policies in early 2026.

While OPEC members like the United Arab Emirates dismiss the idea of an oversupply, the pause in production hikes signifies a precaution against potential inventory builds. The market remains uncertain as it navigates changing trade flows and the impact of geopolitical events on oil supply and demand.

Read more at Yahoo Finance: Markets Scramble to Assess the Size of the Oil Glut