Factors contributing to oil surplus
Mr. Choeib Boutamine
January 11, 2025
The current increase in oil prices is temporary, given the existing surplus in the oil market. The global economic recession, in addition to China’s slowing demand for oil in 2024 (China purchased only 20 percent of global oil, unlike in previous years), contributed to the growing oil glut.
During the year 2025, it is expected that supply will exceed demand, with a surplus of about 1 million barrels per day.
The US sanctions can be imposed on Russia and Iran only if oil prices further decrease; however, if prices exceed 80 dollars per barrel, it is unlikely that sanctions will be enforced, given that sanctions mean absorbing the market’s surplus and thus a further increase in prices, which does not align with US interests.
