18 February 2026 | 7:52PM EST Commodities Research OIL ANALYST Sanctioned Crude at Sea Means Scarcity on Land Daan Struyven +1(212)357-4172 | daan.struyven@gs.com Goldman Sachs & Co. LLC Filippo Cuscito +44(20)7051-9073 | filippo.cuscito@gs.com Goldman Sachs International Alexandra Paulus +1(212)902-7111 | alexandra.paulus@gs.com Goldman Sachs & Co. LLC Yulia Zhestkova Grigsby +1(646)446-3905 | yulia.grigsby@gs.com Goldman Sachs & Co. LLC Investors should consider this report as only a single factor in maki ...

February 23, 2026 05:58 AM GMT The Oil Manual | Europe Iran Scenarios Oil is rallying on risk, not tightness: physical signals eased as options skew surged. We map four Iran scenarios—from premium unwind to transit impairment—and keep our base case for Brent drifting toward ~$60 as risk premia fade and balances soften. Key Takeaways Exhibit 1: Freight have surged, partly due to rising Middle East tensions | M February 23, 2026 05:58 AM GMT | | Idea | | --- | --- | --- | | The Oil Manual Europe | Morgan Stan ...

22 February 2026 | 6:57PM EST Commodities Research OIL ANALYST Raising Our Price Forecast on Lower OECD Stocks Despite Same Global Surplus; Geopolitical Risks Persist Daan Struyven +1(212)357-4172 | daan.struyven@gs.com Goldman Sachs & Co. LLC Yulia Zhestkova Grigsby +1(646)446-3905 | yulia.grigsby@gs.com Goldman Sachs & Co. LLC Alexandra Paulus +1(212)902-7111 | alexandra.paulus@gs.com Goldman Sachs & Co. LLC Filippo Cuscito +44(20)7051-9073 | filippo.cuscito@gs.com Goldman Sachs International Investors sh ...

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the oil industry, particularly the dynamics surrounding crude oil prices and geopolitical influences affecting supply and demand. Core Insights and Arguments - **Brent Crude Price Movement**: The Brent crude price increased by $3 per barrel due to ongoing US-Iran discussions, despite the US imposing sanctions on more Iranian oil tankers and advising US ships to avoid Iranian waters [3][4][6]. - **Geopolitical Risks**: The Polymarket prediction market indicates a ~56% chance of the US striking Iran by June 30, 2025, leading to increased market premiums for insurance against oil price spikes [3][4]. - **Global Stock Changes**: Global visible stocks built by only 0.5 million barrels per day (mb/d) in January, a significant deceleration from the previous 1.4 mb/d builds over the last 90 days. Total global stocks, including "invisible," built by 1.6 mb/d in January, which is 2.0 mb/d lower than expectations due to supply disruptions in Kazakhstan, Venezuela, and the US [3][4][6]. - **Oil on Water**: There has been a sharp increase in oil on water, likely due to buyers securing oil amid heightened geopolitical uncertainty [3][4]. - **Sanctioned Oil Imports**: Imports of oil from Russia, Iran, and Venezuela increased by 0.8 mb/d (or 10%) over the last two weeks, although sanctioned oil on water remains elevated [3][4]. - **Venezuela's Oil Exports**: Venezuela's crude exports reached a 7-year high as Asian purchases increased, despite being 0.2 mb/d below last November levels [3][4]. - **Russia's Oil Production**: Russia's oil production and total exports rebounded in January, despite a 1.2 mb/d year-to-date decline in exports to India and China due to significant redirection [3][4]. Additional Important Insights - **Investor Behavior**: There has been a rotation towards hard assets, including commodities, which has contributed approximately $6 per barrel to the rise in crude prices year-to-date [7][4]. - **Supply Disruptions**: January supply disruptions are expected to be temporary, with oil exports from the CPC terminal likely remaining 0.3 mb/d below normal levels in February [7][4]. - **Long-to-Short Oil Ratio**: The long-to-short oil ratio increased to 2.6, placing it at the 89th percentile in a sample from May 1, 2024, indicating a bullish sentiment among investors [13][4]. - **OECD Commercial Stocks**: OECD commercial stocks decreased to 2,804 million barrels (mb), which is 38 mb below the end-of-January forecast of 2,842 mb [16][4]. Conclusion - The oil market is currently influenced by geopolitical tensions, particularly involving Iran, and supply disruptions from key oil-producing countries. The dynamics of oil imports and exports, especially from sanctioned countries, are critical to understanding current price movements and future trends in the oil industry.

Summary of the 2026 Refined Products Outlook Industry Overview - The report focuses on the refined products industry, specifically diesel and gasoline margins in the US, Europe, and Asia, as analyzed by Goldman Sachs Global Investment Research [1][6][30]. Key Insights and Arguments 1. **Margin Performance in 2025**: - US diesel margins rose by $5/bbl (+20%) year-over-year despite a 14% decrease in crude prices, driven by disappointing refining capacity additions and solid demand [2][6]. - The average US diesel margin reached $28/bbl, nearly 75% above the 2013-2019 averages [6]. 2. **2026 Margin Forecast**: - Expected margins for 2026 are projected to remain $5-15 above the 2013-2019 averages, with US diesel margins forecasted at $31/bbl and gasoline margins at $18/bbl [2][8][41]. - European diesel and gasoline margins are expected to be slightly above market forwards at $23/bbl and $13/bbl, respectively, due to a ban on products refined from Russian crude [41][42]. 3. **Global Refining Utilization**: - The global refining utilization rate is anticipated to rise above the 70th percentile of historical averages in 2026, driven by limited capacity additions and strong demand growth [2][31]. - A projected increase in global refining utilization rates and freight rates is expected to support a constructive outlook for global products margins [2][30]. 4. **Regional Dynamics**: - Stricter renewable fuels blending requirements in the US are likely to increase Renewable Identification Number (RIN) costs, further supporting margins [41]. - In Asia, expected delays in new refining capacity additions and fiscal pressures on independent refineries are likely to support margins, projected at $19/bbl for diesel and $8/bbl for gasoline in 2026 [43]. 5. **Moderation in 2027**: - A slight decrease in global products margins is expected in 2027 as refining capacity grows in emerging markets and product stocks recover to seasonal norms [2][44]. 6. **Upside Risks**: - Risks to the margin forecast are skewed to the upside, particularly for diesel, due to potential delays in emerging market capacity additions, disruptions in Russian refinery operations, and high freight rates [50][54]. - A hypothetical escalation in geopolitical tensions, such as in Iran, could further boost diesel margins by reducing stocks and increasing freight rates [60]. Additional Important Insights - **Freight Rates**: The average clean tanker freight rate is expected to increase by $1.6 to $6.3/bbl, influenced by high oil on water levels and geopolitical uncertainties [35][36]. - **Refinery Capacity Additions**: The report highlights ongoing challenges in the execution of refinery projects in India, with significant delays expected in capacity additions [69]. - **Geopolitical Factors**: Geopolitical shocks, including drone attacks on Russian refineries, have contributed to a tightening of the refined products market, impacting margins positively [16][52]. This comprehensive analysis provides a detailed outlook on the refined products market, emphasizing the interplay of demand, geopolitical factors, and refining capacity dynamics.

Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the **oil and refining industry**, focusing on crude oil prices, refining margins, and geopolitical risks affecting supply and demand dynamics. Core Insights and Arguments 1. **Crude Oil Price Trends** - Crude oil prices have strengthened due to disruptions and rising risk premiums, with a near-term target of **$70/bbl for Brent** [1] - The situation with Iran remains fluid, with expectations of escalation before de-escalation, impacting price volatility [1][2] - Recent discussions regarding US-Iran negotiations have eased immediate risk premiums, but concerns about upside risks persist due to US actions and Indian purchases of Russian oil [2] 2. **Refining Margins** - Refining margins are expected to compress further due to: - Potential oil supply disruptions or diversions from Russian oil [4] - Higher year-on-year refinery capacity growth and availability [4][17] - Looser fundamentals of gasoline compared to middle distillates [4][17] - Gasoline inventories are surging, pressuring gasoline crack spreads, while gasoil and jet fuel cracks are supported by tighter inventories and geopolitical risks [5][37] 3. **Geopolitical Risks** - Middle distillates, including gasoil and jet fuel, are more vulnerable to geopolitical disruptions than gasoline due to higher exports from the Middle East [41][42] - The US seeks to negotiate Iran's nuclear disarmament and missile control, while Iran is open to nuclear talks but resistant on other fronts [2][10] 4. **US Oil Inventories** - US commercial crude oil inventories fell by **3.5 million barrels** to **420.3 million barrels**, which is **-3.5 million barrels** compared to the same period last year [62] - Diesel inventories decreased by **5.6 million barrels** to **127.4 million barrels**, while gasoline inventories rose by **0.7 million barrels** to **257.9 million barrels** [63][64] 5. **Market Dynamics** - The US oil market is experiencing a tightening of crude oil and diesel stocks due to cold weather affecting heating demand and refinery activity [62] - The amount of oil on-water worldwide fell by **9.0 million barrels** to **1305.9 million barrels**, indicating a potential shift in supply dynamics [55] Other Important Insights - The geopolitical landscape remains uncertain, with ongoing negotiations between the US and Iran potentially impacting oil prices and market stability [9][11] - The passing of Saif al-Islam Gaddafi in Libya could shift domestic political dynamics, potentially stabilizing the oil sector if governance improves [13] - OPEC+ has quietly tightened supply, with exports dropping from **31 million barrels per day** in early Q4 2025 to **29 million barrels per day** in January 2026 [14] This summary encapsulates the critical points discussed in the conference call, highlighting the interplay between geopolitical factors, market dynamics, and inventory trends in the oil and refining industry.

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the oil industry, specifically the Brent crude oil market, and discusses the recent price movements and forecasts for 2026 and beyond [1][2]. Core Insights and Arguments 1. **Oil Price Rally**: Oil prices have increased significantly in early 2026, driven by supply disruptions, strong demand from China, currency weakness, and geopolitical risks. Brent prices reached $72.7 per barrel at the end of January 2026, contrary to earlier expectations of a decline into the high $50s [9][10]. 2. **Geopolitical Risk Premium**: A geopolitical risk premium of $6-7 per barrel is currently embedded in oil prices, influenced by tensions in the Middle East, particularly regarding Iran [3][39][42]. 3. **Supply Disruptions**: Key supply disruptions occurred in Kazakhstan, the US, and Venezuela, tightening physical balances in January. These disruptions are expected to be temporary, with a return to normal production levels anticipated soon [15][19]. 4. **Chinese Demand**: China has been actively stockpiling crude oil, with an estimated 2.3 million barrels per day in December 2025, which has helped absorb surplus oil and mitigate downward pressure on prices [31][33]. 5. **Currency Concerns**: Ongoing fiscal deficits in the US and Europe are raising concerns about monetary debasement and inflation, leading investors to seek traditional hedges like oil and gold [27][30]. 6. **Forecast Adjustments**: Near-term Brent price forecasts have been raised to $62.5 for Q1 2026 and $57.5 for Q2 2026, while maintaining a long-term outlook of prices trending below $60 per barrel later in the year [5][54]. Additional Important Content 1. **Market Dynamics**: The report emphasizes that while current price increases are notable, they do not fundamentally alter the long-term outlook for oil prices, which are expected to trend downwards due to rising inventories in key pricing locations [12][48]. 2. **Historical Context**: The report provides historical context for oil price movements during geopolitical tensions, illustrating how past events have influenced market reactions and price spikes [39]. 3. **Inventory Projections**: Global crude inventories are projected to increase by approximately 730 million barrels in 2026, with significant contributions from non-OECD countries and oil-in-transit [51][52]. 4. **Refinery Operations**: The report notes that refinery runs and operations are expected to stabilize, with some regions experiencing outages that could impact supply dynamics [128]. This summary encapsulates the key points discussed in the conference call, providing insights into the current state and future outlook of the oil industry.

Summary of Key Points from the Conference Call Industry Overview - The conference call focuses on the **Chinese oil industry**, specifically discussing oil demand, imports, refinery operations, and inventory levels for December 2025 and the outlook for 2026. Core Insights and Arguments 1. **Apparent Oil Demand Growth**: China's apparent oil demand grew by **4% YoY** in December, marking the **eighth consecutive month** of growth, driven by strong demand for naphtha and gasoline [3][7][22]. 2. **Record Crude Imports**: Crude imports reached a record high of **13.2 mb/d** in December, with significant contributions from the Arab Gulf, Brazil, and Russia. This increase was attributed to state-owned refiners boosting Strategic Petroleum Reserve (SPR) injections [4][58][59]. 3. **Refinery Operations**: Refinery runs were flat month-over-month (MoM) in December due to a shortage of refined product export quotas and soft seasonal demand. State-owned refiners prioritized maximizing petrochemical feedstock yields over travel fuels [5][66]. 4. **Crude Inventory Build**: China's crude inventories built by **31.3 million barrels** in December, marking the first significant build since July. Total observable inventories increased by approximately **70 million barrels** in 2025 [6][169]. 5. **Diesel Demand Trends**: Diesel demand was broadly flat MoM, with a slight decline of **20 kb/d**. The manufacturing sector showed improvement, but cold weather impacted construction and logistics activities [13][15]. 6. **Gasoline Demand Dynamics**: Gasoline demand remained flat MoM but increased by **5% YoY** in December. The demand was supported by a low comparison base from the previous year [18][20]. 7. **Jet Fuel Demand**: Jet fuel demand was down **1% YoY** in 2025, but adjusted estimates suggest modest growth. Seasonal trends typically lead to a decline in demand towards year-end [33][31]. 8. **Naphtha Demand**: Naphtha demand fell by **40 kb/d MoM** but was up **13% YoY**. The increase was driven by new cracker capacity coming online [46][48]. 9. **Refinery Output Changes**: Overall refinery output of jet fuel rose **15% YoY** in December, while gasoline and diesel outputs fell by **2% and 1%** respectively [153][165]. 10. **Future Outlook for Diesel**: Diesel demand is expected to continue declining in 2026 due to fuel-switching trends in the trucking sector, although government policy may provide some support [16][19]. Additional Important Insights 1. **Impact of Tariffs and Subsidies**: The improved manufacturing PMI in December was attributed to lower tariffs and fiscal easing, which may support diesel demand [14]. 2. **Government Policies**: The Chinese government plans to introduce a consumption tax on naphtha, which could shift refiners' strategies towards importing naphtha rather than producing it domestically [49][85]. 3. **Independent Refiners' Performance**: Independent refiners increased their utilization rates to **56.2%** in December, benefiting from lower run rates at state-owned refineries and access to discounted crude [143][146]. 4. **Export Quotas**: China released its first batch of clean product export quotas for 2026, totaling **19 million tons**, which may influence future export strategies [104][106]. This summary encapsulates the key points discussed in the conference call, providing a comprehensive overview of the current state and future outlook of the Chinese oil industry.

Summary of Key Points from the Conference Call Industry Overview - **Industry**: Oil and Gas Sector in China - **Focus**: Opportunities in deep-sea exploration and oil price recovery Core Insights 1. **Deep-Sea Exploration Growth**: The acceleration in the deep-sea exploration permitting framework in the US has attracted investor interest in deep-sea mining and oil & gas exploration. Notably, order intake for FPSOs has significantly increased, driven by deepwater and ultra-deepwater oilfield exploration in South America and Africa [2][2] 2. **Guyana's Oilfields**: The Stabroek oilfield in Guyana, developed by ExxonMobil (45%), Chevron (30%), and CNOOC (25%), is highlighted as a key area of growth. Four additional projects are under construction, with expected production ramp-ups leading to higher returns by 2030 [2][2] 3. **Oil Price Forecasts**: UBS has revised its oil price forecasts, lowering the 2026 estimate to US$62/bbl due to anticipated oversupply of 1.9Mb/d. However, a gradual recovery is expected as supply and demand improve [3][3] 4. **Impact of US Sanctions on Venezuela**: If US sanctions on Venezuela are lifted, production could recover to 1Mb/d, potentially increasing to 1.2-1.3Mb/d. This could exert additional pressure on the oil market in 2026, but the overall supply-demand dynamics are not expected to change significantly [4][4] Company-Specific Insights 1. **PetroChina and CNOOC Price Target Adjustments**: - PetroChina's price target raised to Rmb14.0/HK$11.5 from Rmb12.9/HK$10.3, reflecting a re-rating of the oil and chemical sector [5][5] - CNOOC's price target increased to HK$30.0 from HK$26.5, based on a higher EV/EBITDA multiple [5][5] 2. **Valuation Comparisons**: China's oil majors are trading at lower valuation multiples compared to their overseas peers, with an average 2026E PE/PBV of 11/1.0x versus 13/1.6x for global counterparts. This suggests potential upside for Chinese oil companies [5][5] Additional Insights 1. **Dividend Yield**: The average dividend yield for A+H shares of China's oil majors is projected at 5.2%, which is above the overseas peer average of 4.8% [5][5] 2. **Market Dynamics**: Teapot refineries in China, which typically import Venezuelan crude, may shift to cheaper alternatives like Russian crude, indicating a limited impact from potential Venezuelan oil supply increases [4][4] Conclusion - The oil and gas sector in China is poised for growth, particularly in deep-sea exploration, with favorable long-term price recovery expectations. Companies like PetroChina and CNOOC are well-positioned to benefit from these trends, despite short-term challenges related to oil supply dynamics and geopolitical factors.

Summary of Global Oil Market Conference Call Industry Overview - The conference call discusses the global oil market, focusing on supply and demand dynamics, price forecasts, and geopolitical risks affecting oil production and pricing. Key Points Oil Price Trends - Oil prices have fluctuated within a $7/bbl range, with Brent rebounding to the mid-$60s due to geopolitical risks, particularly concerning Iran and disruptions in Kazakhstan [2][9] - The market is expected to remain in a large surplus, with Brent prices projected to stay low in the near term [9][10] Supply and Demand Forecasts - The global oil market is projected to have a surplus of over 2Mb/d in 2026, with the IEA forecasting a surplus of 3.7Mb/d and the EIA at 2.8Mb/d [3][22] - Demand growth forecasts for 2026 vary: UBS estimates 1.4Mb/d, while the EIA revised down to 1.1Mb/d, and OPEC remains unchanged at 1.4Mb/d [29][33] - Non-OPEC+ supply growth is expected to slow, with UBS raising its forecast to 0.7Mb/d for 2026, primarily driven by the US [37][66] Geopolitical Risks - Kazakhstan's oil output has been affected by disruptions, with potential outages reaching up to 1Mb/d due to issues at the Tengiz and Korolev oilfields [60][65] - OPEC+ compliance remains a concern, with the potential for supply disruptions in Russia and other member countries impacting overall production [10][11][65] Price Scenarios - Upside scenarios for oil prices could arise from supply disruptions, particularly in Russia, potentially pushing Brent prices closer to $70/bbl [10] - Downside risks include resolutions to current supply disruptions, which could lower prices below $60/bbl, especially if a recession occurs [11] Production Adjustments - OPEC+ output in December decreased by 40kb/d, with significant reductions from Kazakhstan, Saudi Arabia, and Iraq, despite a rebound in Russian output [5][92] - The unwinding of OPEC+ voluntary cuts is expected to resume in April 2026, with a planned increase of 137kb/d per month [97] Long-term Outlook - The long-term outlook suggests that oil demand may peak around 2030, with a plateau expected rather than a sharp decline thereafter [69] - The impact of electric vehicles (EVs) is anticipated to gradually reduce gasoline demand, with a significant shift expected by 2030 [75] Conclusion - The global oil market is characterized by a significant surplus, mixed demand forecasts, and geopolitical uncertainties that could influence both supply and pricing dynamics in the near to medium term [60][62]