JPMorgan Sees 1.4 Million bpd Global Oil Surplus in October

JPMorgan estimates the global oil market ran a 1.4 million barrels-per-day (bpd) surplus in October, meaning supply exceeded consumption.

By Olivia Hart

What changed in the global oil balance?

Three figures define the market balance:

• September surplus: 1.1 million bpd.
• October surplus: 1.4 million bpd.
• 2025 average surplus: 1.3 million bpd.

JPMorgan set out its balance estimates in a Wednesday note, with the figures reported Nov. 4. The October estimate nearly matched the 2025 average surplus.

Global crude imports reached 44.9 million bpd in October. That total stood 1.3 million bpd above the same month a year earlier. The increase means more barrels moved through international markets.

Inventories and flows both point to a widening cushion of spare crude, according to JPMorgan. After months of disruption, the bank tied the earlier deficit (consumption exceeding supply) to lost Middle Eastern barrels and logistics bottlenecks arising from the U.S.-Israeli war with Iran. Recovering supply has loosened those constraints.

Takeaway: More traded barrels and looser supply conditions have put the market back into surplus.

Which supply routes drove the recovery?

Middle Eastern exports climbed to roughly 20.7 million bpd in October. The regional low was 9.8 million bpd in March, shortly after hostilities began in late February. That rebound marks a meaningful recovery in worldwide supply.

The recovery remains incomplete. Middle Eastern shipments have not fully retraced their pre-conflict path. JPMorgan called the rebound in regional exports the largest single driver of the wider surplus.

Supply outside the region has added further weight. JPMorgan reckons Latin America is shipping about 1.5 million bpd more crude than a year ago. Brazil, Venezuela, Guyana and Argentina sit behind most of the gain. These barrels add supply outside the disrupted Middle East market.

Middle Eastern exports have rebounded from their March low, although the region still ships less than before the conflict and non-Middle Eastern output has added another substantial volume of crude.

Takeaway: The supply cushion now rests on recovering Middle East shipments and higher Latin American exports.

Why did demand weaken?

JPMorgan estimates global demand has fallen by about 3.3 million bpd since the conflict started. Elevated fuel prices and disrupted supply chains have curbed consumption.

The bank's October balance therefore combines two opposing movements. More crude crossed borders while estimated oil use remained weaker than before the conflict. Import growth did not prevent the market from returning to surplus.

JPMorgan attributes the 3.3 million bpd demand loss to elevated fuel prices and disrupted supply chains, which have reduced consumption even as international trade has carried more crude.

Takeaway: Fuel prices and supply-chain disruptions have reduced oil use across the global market.

What does the surplus mean for traders?

Market tightness followed the outbreak of the Iran conflict. Lost Middle Eastern barrels and logistics bottlenecks pushed the market toward deficit.

JPMorgan says those constraints have eased considerably as alternative supply sources ramped up. The bank expects the supply-demand balance to remain tilted toward excess in the near term. Recovering exports and softer consumption support that result.

A sustained surplus would mean a looser physical market, less upward pressure on crude benchmarks (reference oil prices) and a second downward force from weaker consumption, according to JPMorgan. Fresh regional escalation would challenge that near-term assessment.

Takeaway: A larger barrel cushion and weaker demand limit near-term upward pressure on crude prices.

What should traders watch?

October provides the latest baseline: about 20.7 million bpd of Middle Eastern exports, 44.9 million bpd of global crude imports and an estimated 1.4 million bpd surplus. Demand adds a second variable after an estimated 3.3 million bpd decline since the conflict began.

Traders should watch whether Middle Eastern shipments continue toward pre-conflict levels, whether October's import strength persists, and whether any fresh escalation changes the supply balance.

Takeaway: Watch regional shipments and escalation; either can change the surplus outlook.