The global crude oil market is moving back towards oversupply, according to analysts at Goldman Sachs and JP Morgan. Demand destruction caused by high prices is easing fears of a supply deficit and reviving concerns about a glut, according to Oilprice.com, which reports that JP Morgan estimates the global oil market returned to a surplus of 1.1 million barrels per day in September, widening to 1.4 million barrels per day in October. That October surplus nearly matches last year's average of 1.3 million barrels per day.
The estimates were published in a JP Morgan report released during the same week, as cited by Oilprice.com (source: JP Morgan report, via Yahoo Finance). Goldman Sachs takes a different view. The bank assesses the oil market as balanced in both September and October, citing reports of recovering oil exports from the Persian Gulf, despite intensified Iranian attacks on tankers in the Strait of Hormuz, with five such attacks reported since Sunday alone (source: Oilprice.com).
Goldman also said it did not detect any global oil inventory declines over the last two months, following a series of draws in previous months that had helped keep a lid on fuel prices. Price signals, however, suggest the glut call may be premature. According to Oilprice.com, futures remain substantially higher than at the start of the year, and so do physical prices.
The war premium is still very much present, although it has weakened somewhat following the Democrats' sweeping victory in the U.S. midterm elections. On the recovery of oil flows out of the Strait of Hormuz, Vortexa calculated flows at 14 million barrels per day, including condensates, equal to 86% of pre-war levels (source: Vortexa, as cited by Oilprice.com). However, Reuters analyst George Morris noted that October data show Middle East seaborne oil exports pulled back slightly from recent post-war highs due to heightened risks in the Strait of Hormuz (source: Reuters).
The International Energy Agency, in its latest monthly Oil Market Report for October 2026, estimated the destruction of oil demand this year at 2.6 million barrels per day. The agency estimated a supply recovery of 2.5 million barrels in September, but warned that on an annual basis supply will decline by 5.8 million barrels per day, to a total of 100.7 million barrels per day (source: IEA Oil Market Report, October 2026).
Source: oilprice.com