The Myth of the Oil Glut Is Dead

AI Summary

An analysis argues that the long-held narrative of a structural global oil glut is no longer valid, citing shifts in supply dynamics from US shale, Russian exports, Iranian barrels, and energy transition demand. The piece challenges the consensus view held by banks, financial analysts, and energy agencies for nearly a decade. It suggests oil markets are entering a tighter supply environment with significant price implications.

For almost a decade, the global oil debate has been dominated by a powerful narrative: the world is drowning in crude. Financial pundits, banks, and energy agencies were all hitting the drums to announce a structural “oil glut”. A majority in oil markets was following the theory that the combined impact of US shale expansion, Russian exports, and sanctioned Iranian barrels quietly appearing in markets, along with slower demand due to energy transition investments, would all subdue prices for years. As indicated by the IEA, but also…