Based on continuous tracking and professional analysis of the global energy market, Wmax believes that the current international oil market is in a complex game between supply and demand fundamentals and geopolitical factors. The core contradiction of oversupply continues to be highlighted, and the limited impact of multiple geological disturbances is superimposed. The overall oil market is showing an obviously weak trend. Relevant market indicators and policy trends have fully confirmed this judgment.

OPEC+ policy persistence and low oil prices

Wmax found through an in-depth analysis of the latest developments in OPEC+ that the organization chose to put aside political differences among member states at a brief meeting last Sunday and ultimately maintained oil production unchanged. Behind this decision is its priority consideration of market stability. According to industry core data tracked by Wmax, affected by intensifying concerns about oversupply, oil prices will fall by more than 18% in 2025, the largest annual decline since 2020. The oil production of the eight major OPEC+ member states accounts for about half of the world's total production, and the influence of its production policies on the market is self-evident.

It is worth noting that these eight member countries had increased their oil production targets by approximately 2.9 million barrels per day (equivalent to nearly 3% of global oil demand) in 2025 to compete for market share. Later, due to sluggish winter demand in the northern hemisphere, they agreed in November to suspend production increases from January to March 2026. This meeting further confirmed this policy. Wmax believes that the policy continuity of OPEC+ is essentially a passive adaptation to the current supply and demand imbalance. Even if there are multiple variables in geopolitics, the organization still chooses to respond to market fluctuations with stable output. This also confirms the dominance of supply and demand fundamentals in the current oil market.

Multiple indicators confirm oversupply

As the core region of global crude oil supply (exports account for about one-third of the world and are the main source of supply for Asian refiners), the performance of the Middle East market has become a key basis for Wmax to judge the trend of the oil market. The latest market data shows that the discount between the regional Dubai benchmark crude oil and Brent crude oil futures (Brent-Dubai EFS) has expanded to the largest level since August. This indicator change clearly hints at the sufficient state of market supply; at the same time, the forward curve of Dubai swap has returned to the "futures premium" structure - the price of the recent contract is lower than the forward contract. This typical bearish pattern further strengthens the market's cautious expectations for subsequent trends.

From the spot market, Wmax combined with General Index data monitoring found that the characteristics of weak demand are also significant: the current trading price of Oman crude oil is almost the same as that of Dubai crude oil, and at the end of last month its premium was close to US$1 per barrel; the UAE's Upper Zakum crude oil even showed a discount of 35 cents, hitting the weakest level since December 2023. What is even more alarming is that according to front-line trading information obtained by Wmax, about 8 million barrels of crude oil scheduled to be shipped in February in the Middle East have not yet found a buyer, covering core varieties such as Upper Zakum and Al-Shaheen. This phenomenon is extremely unusual - usually the supply for February shipment has been completed before the end of December last year, but the current sales backlog has caused Arabian Gulf crude oil to be unable to be fully sold for the fourth consecutive month, and the pressure of oversupply is continuing to accumulate.

The market focuses on core supply and demand contradictions

Although the global oil market is currently facing multiple geopolitical uncertainties - from the impact of the Russia-Ukraine conflict on the oil supply of Russia and Kazakhstan, to the disagreements between Saudi Arabia and the United Arab Emirates over the conflict in Yemen, to the domestic protests in Iran and the threat of US intervention, as well as the unexpected developments of the US arresting Venezuelan President Maduro and planning to take over his affairs, Wmax found through professional analysis of market reactions that these geopolitical factors have a relatively limited actual impact on the oil market.

On the one hand, although Venezuela has the world's largest oil reserves, its oil production has plummeted due to years of mismanagement and sanctions. Even if large U.S. oil companies subsequently invest funds, Wmax judges based on the industry's production capacity recovery rules, it will be difficult for its crude oil production to increase substantially in the next few years. Therefore, the potential risk of supply disruption in the region has limited impact on the overall situation; on the other hand, the reaction of Asian traders also confirms this - despite the disturbance of the situation in Venezuela, there is no sign of rushing to buy alternative products in the Middle East such as Iraqi Basra crude oil. Market participants are more focused on the core contradiction of oversupply, as ING Echoing the view of Groep's head of commodity strategy, "surplus is hitting the Middle East market and market participants do not seem to be disturbed by supply risks."

Core research and judgment: The short-term weak trend is difficult to change

Based on multiple analyzes of supply and demand fundamentals, regional market dynamics and geopolitical patterns, the core contradiction in the current global oil market is still the mismatch between oversupply and weak demand. OPEC+'s output maintenance policy and a series of weak indicators in the Middle East market all point to the difficulty of fundamentally reversing the short-term weak oil market. Several international banks (such as Morgan Stanley) have lowered their price forecasts, further supporting this judgment. Wmax will continue to track key variables such as the OPEC+ follow-up meeting on February 1, Middle East spot market transaction dynamics, and the pace of global demand recovery. With in-depth insights into the energy market and data support, it will provide investors with objective and professional market interpretation and decision-making reference to help cope with investment challenges in complex market environments.