HSBC expects a big oil surplus of 1.7 million barrels per day (mbd) from the fourth quarter of 2025, and a surplus of 2.4 mbd in 2026, exacerbated by the return of OPEC+ barrels over the next 12 months, it said in a note on Monday.
At its meeting this month, OPEC+ opted to further increase oil production by 137,000 bpd in October, starting to unwind the 1.65 million bpd in cuts ahead of schedule.
HSBC’s latest oil market supply and demand model envisions OPEC+ gradually unwinding 1.65 million barrels per day in the “first-phase” voluntary production cuts over a 12-month period, HSBC said a week ago.
The bank also saw a downside risk to its 2026 $65 per barrel Brent price assumption if stockbuilds materialise in the West.
U.S. President Donald Trump urged EU officials last week to hit China with tariffs of up to 100% as part of a strategy to pressure Russian President Vladimir Putin.
The bank’s note on Monday stated that “outright losses in Russian supply are not in (HSBC’s) base case (but) Russia will struggle to increase its output in line with OPEC+ quotas.” The bank now expects only a modest production increase, lowering its end-2026 Russian production forecast by 300,000 bpd.
(Reporting by Ishaan Arora and Anushree Mukherjee in Bengaluru, Editing by Louise Heavens and Bernadette Baum)