The curious case of oil-on-water

The market is facing being drowned in excess crude, but one caveat is that a large chunk is due to buyers reluctant to snap up sanctioned barrels

Oil prices have defied the IEA’s view of oversupply for several months, even as OPEC has ramped up production. However, recent reports of ballooning supply must be ringing alarm bells in the capitals of key oil producers. Although reports of more than 1b bl of oil floating on water are true, fears of geopolitical turmoil are keeping key benchmarks at levels of around $60/bl. OPEC+ made the right decision to refrain from boosting output, starting in January 2026, but the group might have to do more if demand does not pick up soon, given the magnitude of oil afloat. Key tanker-tracking agencies and shipping research analysts estimate that up to 1.25b bl of crude oil and condensates remain at s