The global crude oil market is experiencing a worsening oversupply; a "six-year low" may be approaching in 2025-26, and investors should be wary of structural risks.

I. The dual pressures of surging supply and slowing demand become prominent.

According to the latest IEA report, global crude oil supply is projected to increase by approximately 3 million barrels per day in 2025, while demand growth is only about 710,000 barrels per day, significantly widening the supply-demand gap. argusmedia.com +2 IEA +2
Meanwhile, some OPEC+ members have raised their crude oil production targets by more than 2.7 million barrels per day since April, further exacerbating supply pressures. Reuters +1

On the demand side, slower industrial growth in Europe and the United States, increased adoption of electric vehicles, and reduced demand for aviation and transportation fuels have all contributed to lower-than-usual growth in crude oil consumption. The IEA noted that third-quarter growth was approximately 750,000 barrels per day, a slower pace than in previous years. Furthermore, the World Bank warned that global commodity prices may hit a six-year low in 2026. (Financial Content Market)

II. Price Trend: Moderate Decline but Structural Risks Rising

Analysis and forecasts indicate that despite persistent geopolitical risks, Brent crude oil prices are expected to stabilize around $68 per barrel in 2025 due to accumulating inventories and weak demand growth, while potentially declining to around $52 per barrel in 2026. (eia.gov +1)
For example, Saudi Aramco may soon lower its official selling price for oil to the Asian market in December to a multi-month low in response to bearish market pressure. (Reuters)

Even with declining oil prices, some large oil companies are still generating profits through production expansion and cost control. Chevron and ExxonMobil both recorded high production levels in the third quarter. (Financial Times)

However, from an investment perspective, the key risk at present lies in:

• Rising inventory levels could trigger sellers to accelerate unloading, pushing prices further down.

• If commodities enter a cyclical downturn, the investment returns of related energy and materials sectors will be significantly compressed.

• In an environment of depressed oil prices, the fiscal and sovereign risks of emerging oil-producing countries may be exposed, affecting overall market stability.

III. Global and Strategic Perspective: Who are the winners and who are under pressure?

In this environment, different regions and industry chains react differently:

• On the winners side: the refining and petrochemical industry may gain a cost advantage when supply is ample and crude oil prices are low; oil and gas equipment and service providers may also benefit if they can improve efficiency.

• On the pressure side: High-cost oil-producing countries (such as some non-OPEC members) may suffer fiscal and operational pressure due to low oil prices; funds invested in upstream crude oil assets will face a longer payback period.

• Financial Markets: Commodity funds and the energy sector may be sold off. Investors should consider shifting to companies with well-optimized cost structures and stable cash flow , or choosing bonds and renewable energy alternatives.

IV. How should investors respond?

• Maintain flexible asset allocation and avoid making large bets on an "oil price rebound" scenario.

• Increase investment in low-cost, high-efficiency oil companies or refining/chemical chains to reduce direct upstream risks.

• Hedging strategies may include related commodity futures or ETFs , but liquidity and risk should be considered.

• From a long-term perspective, close attention should be paid to the accelerating variables of new energy vehicles, electrification trends, and carbon neutrality policies , as these may further erode fuel demand.

☑ Conclusion

The crude oil market has entered a new cycle characterized by "strong supply, weak demand, and high inventory." 2025-26 may become a crucial period for structural adjustment in the energy sector. Investors who fail to recognize this new pattern of "low growth and high capacity" may fall into a trap of high volatility and low returns.