The season of hellish discounts

Alexey Gromov, Principal Director on Energy studies at the Institute for Energy and Finance, commented to the newspaper Nasha Versia on the current oil surplus on the world market and the prospects for Russian oil exports in 2026.

Alexey Gromov notes that this year there has been an oversupply in the global oil market (according to various estimates, from 1.5 million b/d to more than 2 million b/d by the end of the year). This is indirectly confirmed by the growth and high absolute values of accumulated commercial oil reserves in the world.

According to the expert, it is this factor that constrains the activity of the countries participating in the OPEC+ agreement. They have been restoring production throughout the current year, but the recovery program has already been suspended for the first quarter of 2026.

"How long will the surplus last in the medium term? This will largely depend on two factors," says the expert. – The first is the behavior of the OPEC+ countries. If they consider the current surplus in the oil market not to be a situational factor, but a strategic threat, then the further policy of restoring production by the alliance countries may be reviewed. Moreover, new restrictions on oil production are possible, or at least a complete shutdown of the oil recovery process in 2026."

The second factor is production in the USA. According to media reports, the break-even point of American companies producing shale oil has dropped to $ 37 per barrel, which allows them to increase production even at world prices around $ 60 (in August, the United States produced a record 13.8 million bpd).

"According to our data, this situation is recorded only in individual blocks of the Permian basin, where the break–even bar has actually dropped to $ 37," Alexey Gromov notes. – But at other shale facilities, it was 50+ dollars, and it remained. This applies, for example, to the Niobrara and Eagle Ford shale fields. Moreover, there has been no increase in production there for a long time, but its stagnation and even a slight decrease are taking place."

In his estimation, it is unlikely that the mentioned $37 applies to all blocks of the Permian basin itself. We should also not forget that the United States will have to maintain a very active level of drilling and hydraulic fracturing, primarily on shale projects, just to maintain the oil production volumes achieved in 2024-2025. And given the significant decline in global oil prices that occurred in the second half of this year (and is likely to continue in the first half of 2026), the activity of shale producers in the United States in 2026, on the contrary, may decrease.