Oil Glut Pushes Prices Down, Easing Inflation in 2025—What’s Ahead

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Oil Glut Pushes Prices Down, Easing Inflation in 2025—What’s Ahead
The Valero logo is displayed on a tank at the Valero Wilmington Oil Refinery adjacent to the ports of Long Beach and Los Angeles in the Wilmington neighborhood of Los Angeles on April 10, 2025. PATRICK T. FALLON/AFP via Getty Images
Panos Mourdoukoutas
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Rising global inventories weighed on oil markets in 2025, crushing prices and helping push headline inflation lower. Some forecasters expect the trend to extend into 2026, although views diverge on how prices will evolve amid geopolitical and supply uncertainties.

Inventory Buildup

According to a recent International Energy Agency (IEA) Oil Market Report, global observed oil inventories climbed to four-year highs in October, reaching 8,030 million barrels. Stockpiles averaged 1.2 million barrels per day during the first 10 months of the year.

The buildup reflects a shift in the balance between oil supply and demand. Global liquids demand remained relatively stable, as weaker demand from China was offset by stronger consumption in the United States.

Panos Mourdoukoutas
Panos Mourdoukoutas
Author
Panos Mourdoukoutas is a professor of economics at Long Island University in New York City. He also teaches security analysis at Columbia University. He’s been published in professional journals and magazines, including Forbes, Investopedia, Barron's, IBT, and Journal of Financial Research. He’s also the author of many books, including “Business Strategy in a Semiglobal Economy” and “China's Challenge.”