Oil’s Problem Isn’t Iran or Russia — It’s Too Much Oil

Group 1: Oil Price Trends - Crude oil prices are retreating after a rise due to potential U.S. strikes on Iran, with Brent crude and WTI reaching their highest levels in months, challenging bearish forecasts for the year [1] - Goldman Sachs has revised its price predictions for 2026, expecting Brent crude to decrease further after losing about 20% of its value last year, indicating a significant supply surplus over demand [2][3] Group 2: Supply and Demand Dynamics - Observers predict a 2.3 million barrels per day surplus in 2026, suggesting that lower oil prices may be necessary to rebalance the market and support demand growth, unless there are major supply disruptions or OPEC cuts [3] - The U.S. has effectively taken over Venezuela's oil industry, selling the first batch of Venezuelan crude for $500 million, which contributes to a bearish sentiment in the market, although industry executives caution against expecting a rapid increase in Venezuelan oil production [4] Group 3: Geopolitical Factors - Recent drone strikes on tankers in the Black Sea have raised concerns about supply disruptions, alongside fears of interruptions in Iranian oil flows, with Kazakhstan reporting a 35% drop in oil output due to attacks [5] - The European Union plans to further reduce its price cap on Russian oil to $44.10 per barrel, aiming to diminish Russia's oil revenues, although previous price caps have not significantly impacted the Russian budget [6]