Oil's wild first half of the year upended everything Wall Street expected - EUROPE SAYS
Oil market watchers entered 2026 widely in agreement on an emerging multibillion-barrel glut that was sure to depress prices throughout the year. That is not what they received. Instead, a series of unexpected. . .
Oil market watchers entered 2026 widely in agreement on an emerging multibillion-barrel glut that was sure to depress prices throughout the year. That is not what they received. Instead, a series of unexpected geopolitical catalysts — above all,the war in Iran— pushed oil prices to levels not seen since 2022, creating the largest energy supply shock on record and forcing traders to set aside all expectations for the first half of the year. Now, with Persian Gulf oil exports renormalizing as the war in Iran seemingly winds down, traders enter the second half of the year in an uneasy calm after the storm. “Despite the daily noise, markets feel remarkably calm, but comfort is not the same as clarity,” Macquarie commodities strategists, led by Peter Taylor, wrote to clients. “H2-26 may prove calmer, but we have set the scene for surprises. ”‘Cartoonishly oversupplied’Coming into 2026, Brent (BZ=F) futures, the international crude oil benchmark, were trading at $60 per barrel; those on US benchmark WTI crude (CL=F) were trading near $57. Just two weeks earlier, in the middle of December, prices on both contracts had fallen to levelsnot seen since 2021. Through the back half of 2025, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) unwound production cuts at a significant rate, increasing the amount of barrels added to the market each month, while other supplier countries outside of the Americas raised their own outputs. Sea-bound oil volumes crossed 1 billion barrels. Read more:You can trade oil futures. What to know before you start. Taken together, the International Energy Agency estimated that the oil market would be oversupplied by nearly 4 million barrels per day in 2026, with prices expected to end the year lower than they started. “At the risk of flogging a very dead horse, our message to the market has remained consistent since June 2023,” JPMorgan strategists wrote in a note to clients in December. “While demand is robust, supply is simply too abundant. ”The oil market, Macquarie analysts wrote at the time, was “cartoonishly oversupplied. ”The first hints that 2026 may not shake out as expected arrived in the early hours of Jan. 3, as news broke that US commandos had forcibly extracted Venezuelan President Nicolás Maduro, setting the stage for a US takeover of the country’s oil industry, which had long sold sanctioned oil to China and a small handful of other buyers. Venezuela is believed to hold theworld’s largest oil reserves,estimated at roughly 300 million barrels of heavy crude, but the industry had fallen into disrepair over the preceding decades, leaving oil traders unsure of what an eventual restart could look like. Benchmark oil futures largely held steady, ticking up only slightly. Tags:Crude OilCrude Oil PriceIranOil Marketoil priceoil pricesPersian GulfPetroleum