OPEC+ Faces Pressure to Balance Surplus and Market Share

OPEC+ walks tightrope as oil glut threatens market dominance.

Production Puzzle

Cartel members grapple with conflicting priorities—cut output to prop up prices or pump aggressively to maintain global market share. Neither option looks particularly appealing when demand forecasts keep getting revised downward.

Strategic Dilemma

Saudi Arabia and Russia lead tense negotiations behind closed doors. Everyone wants higher prices, but nobody wants to sacrifice their slice of the pie. Classic prisoner's dilemma playing out with billion-dollar consequences.

Market Realities

Traders watch inventory builds with growing concern. Another production cut might temporarily boost prices, but could accelerate the transition to alternatives. Because nothing says 'invest in renewables' like artificially expensive oil.

OPEC+ faces its toughest test yet—trying to control a market that's increasingly learning to live without them. Talk about a commodity supercycle hitting the brakes.

Chinese inventories swell by 130 million barrels since March

Antoine Halff, co-founder and chief analyst at geospatial firm Kayrros, estimates that by early September, China’s SPR stood at about 415 million barrels and commercial stocks at about 780 million barrels.

He said the combined total has risen by close to 130 million barrels since late March, putting above-ground capacity use NEAR 60.5% and leaving room for more builds.

Geopolitical tensions have made energy security a top priority for Beijing. China imports over 70% of its oil, so stockpiling crude is crucial. Cheaper prices helped buying, but it’s unclear how much more they’ll add.

“Today, they’re willing to stockpile and willing to increase SPR. This is a clear trend,” said Frederic Lasserre, head of research at Gunvor Group, speaking at APPEC by S&P Global Commodity Insights. He said March and April were impressive, with inventories rising about 200,000 barrels a day, helping support demand and prices.

OPEC+ faces pressure to balance surplus and market share

Many in Singapore expect a late-year surplus as the Organization of the Petroleum Exporting Countries restores idled output, choosing to win back market share rather than defend prices.

President Donald Trump’s sweeping tariffs on U.S. trading partners have added another source of doubt to demand.

All of this makes the size of any surplus hard to judge. OPEC+ can plan to add supply, but capacity issues may slow the return of barrels. Even so, Trafigura Group Chief Economist Saad Rahim said China is likely to keep buying if prices stay low.

“OPEC has announced a huge amount of increases over the past few months, but a lot of those barrels have yet to really make themselves felt in the physical market,” Rahim said. Instead, he noted, Chinese tanks have been filling, while restocking elsewhere has been limited.

One point drew broad agreement on and off stage: a growing electric-vehicle fleet will chip away at a Core source of oil demand.

That is now the defining feature of consumption trends, said Janet Kong, CEO of Hengli Petrochemical International Pte. “GDP growth is less commodity-intensive,” she said, noting that countries such as China have leapfrogged technologies like combustion engines and landline phones. “You don’t have to copy everything others did.”

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