HSBC Warns of Large Oil Surplus From Late 2025
The global oil market is expected to see a major surplus starting in the fourth quarter, according to HSBC analysts. The increase will be driven mainly by rising OPEC+ supply over the next 12 months.
A client note from strategist Kim Fustier’s team forecasts the surplus will expand from 600,000 barrels per day in the second quarter to 1.7 million barrels per day by the end of 2025. By 2026, the oversupply could reach 2.4 million barrels per day.
This projection follows the International Energy Agency’s (IEA) monthly report, which raised its global oil output outlook. The IEA now expects production to grow by 2.7 million barrels per day in 2025, up from a previous forecast of 2.5 million. Another 2.1 million barrels per day increase is anticipated in 2026.
OPEC+ has already agreed to raise production by 137,000 bpd in October. This is lower than earlier monthly hikes of more than 400,000 bpd, but markets are watching closely. The IEA also warned of risks tied to possible new sanctions on Russia and Iran. While harsher restrictions have only had a modest impact so far, exports from both countries have trended lower.
At the same time, OPEC has not adjusted its strong demand growth forecasts for 2025 and beyond. HSBC analysts argue that the oil market remains oversupplied and capable of absorbing potential disruptions.
Oil prices rose on Monday, supported by geopolitical tensions. At 09:17 ET (13:17 GMT), Brent futures gained 0.6% to $67.40 a barrel, while U.S. West Texas Intermediate crude rose 0.8% to $63.21. Both benchmarks advanced more than 1% last week after Ukrainian drone strikes hit Russian energy sites, including Primorsk oil terminal and the Kirishinefteorgsintez refinery.
