Crude Oil Faces Sharp 2025 Losses Amidst Lingering 2026 Surplus Fears

• Crude oil prices are set for over 15% decline in 2025, marking Brent's third consecutive yearly fall and steepest since 2020.
• Global oversupply expectations, resilient US shale production, and OPEC+'s shift to market-share protection are driving the downturn.
• Geopolitical shocks, including wars and sanctions, have had muted and short-lived impacts due to the market's focus on supply durability.
• The International Energy Agency projects a 3.85 million barrels per day surplus by 2026, anchoring market sentiment.
• India's crude imports from Russia fell in December 2025 but Russia remains its top supplier, with flows increasingly rerouted via intermediaries.

Why It Matters: Oversupply concerns will drive significant crude oil losses in 2025, with surplus conditions extending into 2026.