Markets

Two major consultancy reports, McKinsey’s Global Energy Perspective 2025 and Wood Mackenzie’s Energy Transition Outlook 2025-2026, project that fossil fuels will maintain a significant role in the global energy mix for decades, representing a major shift in forecaster sentiment.

The market's prevailing bearish sentiment is rooted in expectations of a major global supply surplus and deep skepticism about the effectiveness of US and EU sanctions on Russian oil.

A landmark report from McKinsey & Company, the Global Energy Perspective 2025, combined with strong demand forecasts from major oil producers like OPEC and Saudi Aramco, indicates a significant shift in the anticipated timeline for the global energy transition.

The oil market is characterized by a growing bearish consensus driven by expectations of oversupply, yet prices are supported by persistent geopolitical risks and high financing costs that could make a coming glut more volatile and destructive than in the past.

The near-term outlook for the global oil market is defined by a fierce clash between rising supply pressures and persistent geopolitical risks, with the former currently dominating prices.

Global oil demand growth is tracking at approximately 0.8 MM b/d year-to-date through Sep. 17, with an average of 104.4 MM b/d, closely aligning with J.P. Morgan (JPM) forecasts.

The global oil market is undergoing a significant and potentially permanent shift, characterized by a fundamental change in supply and demand centers, coupled with increased geopolitical influence.

J.P. Morgan analysts report that oil prices have been trading between $3 and $5 above their estimated fair value for Aug. and Sep.

The oil market is currently a battleground of conflicting forecasts.

A central theme in recent energy discussions is the contrast between long-term, model-based forecasts and the reality of physical market fundamentals.