Macquarie: Oil oversupply deepens as inventory growth accelerates

There is potential for Brent prices to dip into the $45-low $50 range as storage builds accelerate across Asia, the US, and Europe.

Dec. 10, 2025

2 min read

Aerial view of a heavy crude oil tanker traveling with speed over the ocean — Crude tanker freight rates are exceptionally high amid limited vessel availability. If rates climb further, key arbitrage pathways could shut, forcing more crude into onshore storage.

The global crude market remains firmly oversupplied, and current trends point to an increasingly imbalanced supply–demand environment through late-2025 and into early-2026. According to a note from Macquarie Group, a peak surplus of more than 4 million b/d is expected by first-quarter 2026.

Signs of the surplus are showing with continued offshore builds, increasing onshore builds, and extremely strong freight rates, said Vikas Dwivedi, global energy strategist, Macquarie.

Offshore crude inventories have surged by roughly 250 million bbl since late August, while onshore storage has risen by about 30 million bbl over the same period. Over the past month alone, combined offshore and onshore builds have accelerated to nearly 3 million b/d.

Despite these rapid stock increases, the forward curve remains in backwardation—supported by continued Atlantic-to-Asia flows. Roughly one-third of offshore builds are linked to long-haul shipments originating from the Americas and moving toward Asia, tying up floating storage and delaying the impact on onshore tanks. However, as these volumes eventually discharge, the market expects visible onshore builds to accelerate—particularly in Asia first, followed by the US and Europe, the report said.

“We expect onshore builds to accelerate through year 2025 and into early 2026, a process which should drive Brent towards the low $50 range with a possibility of reaching $45/bbl,” Macquarie reported.

Market signals

Crude tanker freight rates are exceptionally high amid limited vessel availability. If rates climb further, key arbitrage pathways could shut, forcing more crude into onshore storage. Conversely, once cargoes discharge and vessels are freed up, freight rates could correct lower—another step that typically precedes visible inventory builds.

“Either way, a freight sell off should lead rising storage statistics,” Macquarie said.

Meantime, price pressure is now spreading across core benchmarks. North Sea markers have softened, while key Brent-linked grades such as West African barrels and Johan Sverdrup have seen notable declines.

Distillate cracks are weakening. Rising availability of sour crude would incentivize higher refining runs and optimize product yield. As a result, refining margins, especially diesel, should soften. Front diesel/gasoil crack now is already over $10/bbl below mid-November peak.

OPEC Official Selling Prices (OSPs) are being lowered, signaling demand weakness and OPEC’s push to defend market share. Russian crude exports remain resilient, with volumes rising again after a brief slowdown between end-October and end-November. Sharply widened Urals discounts appear to be pulling Indian refiners back toward Russian barrels.