Currently, the international crude oil market is indeed a bit frustrating—WTI fluctuates around $59.5 per barrel, with supply-side and geopolitical factors pushing oil prices back and forth like a seesaw. In the short term, expect volatility, but in the long run, there is significant pressure.

**Oversupply is the real main factor**

Global crude oil supply has become a settled fact. The OPEC+ pause on production increases in the first quarter of last year was actually a smokescreen. So far, by 2025, this organization has already restored 2.2 million barrels per day of voluntary cuts, and there are still 1.65 million barrels per day of production increases planned, which are likely to be gradually implemented by 2026.

What truly makes the market uncomfortable is non-OPEC+ countries. Brazil, Guyana, and others are continuously ramping up production. The International Energy Agency (IEA) forecasts that non-OPEC+ supply will increase by 1.2 million barrels per day by 2026. Plus, U.S. shale oil remains at a record high of over 13.8 million barrels per day. The supply pressure is snowballing. Expectations of Venezuela’s crude oil production recovery are also heating up. If that materializes, long-term supply glut will become even more apparent.

**Geopolitical risks can provide some support but won’t change the overall picture**

However, geopolitical tensions are somewhat fluctuating. Recently, U.S.-Iran relations tightened, causing oil prices to rebound briefly. But then the U.S. changed course, shifting focus to economic sanctions, and military strikes were put on hold. The geopolitical premium quickly dissipated. Yet, this situation is not fully settled. As a core member of OPEC+, Iran’s monthly production is around 3.26 million barrels per day. If this number is affected, the short-term supply side will immediately sound the alarm.

The security risks in the Black Sea and Caspian Sea regions have also increased recently. Attacks on the CPC pipeline (which transports light, low-sulfur crude oil) have occurred frequently, putting pressure on the spot market. However, these short-term disturbances mostly cause price rebounds and cannot alter the overarching trend of oversupply.