Speculation is growing that India may reduce purchases of Russian crude under mounting US pressure, following tariff threats from Washington and new reporting requirements for Indian refiners. Early January data already points to softer Russian flows, with bookings well below recent averages. 

Despite ongoing geopolitical risks, oil markets remain structurally oversupplied. Both the International Energy Agency and the US government expect global production to exceed demand by more than 2 million barrels per day in 2025, with the surplus widening into 2026 as non-OPEC supply growth continues. In response, OPEC+ has reaffirmed its decision to pause output increases through the first quarter of 2026. 

Tanker demand set to remain elevated
An oversupplied oil market points to high tanker utilisation, as elevated production levels continue to support seaborne volumes even in a weaker price environment. At the same time, persistent surplus conditions increase the potential for tankers to be used as floating storage, providing an additional layer of demand for vessels despite limited upside in crude prices. On the other side, long-term production surplus and growing storages could pose a minor risk to future oil demand.