Saudi Oil Exports Expected to Rise Significantly in Early 2026 Amid Global Supply Glut Concerns

Saudi crude oil exports are set to register a notable rise at the beginning of 2026, reflecting an increasing abundance in global supplies and bringing back fears of a supply glut in the oil market next year.

According to market reports, Chinese refineries are preparing to receive about 50 million barrels of Saudi crude in upcoming shipments, equivalent to around 1.6 million barrels per day, the highest allocation level since August, with expectations for these shipments to arrive in late January or during February.

Increased Flows to the U.S.

At the same time, estimates indicate that Saudi oil will continue to flow to the United States at elevated levels, with shipments expected to reach about 594,000 barrels per day in January, the highest level since 2022. These flows have pressured crude prices on the U.S. Gulf Coast due to supply abundance compared to domestic demand.

Clear Signs of Global Surplus

These increases come at a time when indicators suggest that global oil markets will face a significant surplus in 2026, as producers - including OPEC members - continue to raise production levels against modest growth in global demand.

According to market observers, the return of some supplies is part of producing countries' efforts to regain market shares after periods of production cuts to support prices.

OPEC+ Position and Oil Prices

With oil prices declining in recent weeks, the OPEC+ group announced last month a suspension of any additional production increases during the first quarter of 2026 in an attempt to mitigate price pressures.

In this context, the International Energy Agency expects the market surplus to reach about 3.8 million barrels per day in 2026, reinforcing the scenario of continued price pressures unless demand improves significantly.

Asia Reflects Weak Near-Term Demand

Japan also witnessed an increase in Saudi oil flows during November shipments, with exports nearing 1.3 million barrels per day, the highest level since April 2023, amid expectations of further increases in December shipments.

Conversely, movements in the oil derivatives market reflect a state of short-term demand weakness, as futures prices for crude in the Middle East approach a contango structure, a traditional signal of abundant supply compared to immediate demand.

Reading the Landscape

This landscape indicates that the oil market will enter 2026 burdened with high supplies, making market balance contingent on the development of global demand, particularly from major economies in Asia and the United States, as well as OPEC+ decisions regarding production management in the coming quarters.