Overview
- Markets have moved from a wartime premium toward expectations of oversupply as visible tanker transits and resumed Gulf loadings ease immediate tightness.
- The International Energy Agency projects a large supply rebound that could create a roughly 5.05 million barrels per day surplus by 2027, pushing futures and bank forecasts toward lower price scenarios.
- Physical bottlenecks remain: throughput through the Strait of Hormuz is far below pre‑war levels at about 3.8 million barrels per day, and mine clearance, insurance and stranded‑vessel backlogs will slow a full recovery.
- Policy actions have shaped the shift — large U.S. SPR releases have cushioned shortages and OPEC has paused further production increases while OPEC+ plans to modestly raise quotas in August.
- Near‑term risks that could reverse the surplus view include renewed Gulf hostilities, changes in OPEC+ output choices, and stronger than expected demand from Asia, so traders should watch diplomatic talks, producer meetings and Chinese import data.