The oil market is grappling with whether sanctioned Russian and Iranian cargoes should still be counted as supply. This may explain why oil prices have been slow to react to a huge glut that is building on the ocean.
The Glut
There are 1.4 billion barrels of oil “on the water”—24% higher than the average for this time of year between 2016 and 2024, according to oil-analytics firm Vortexa. The data measures shipments that are on their way to be unloaded at a port, or cargoes that haven’t yet found a buyer.
The rise of oil on water comes from multiple sources. There has been a 16% year-over-year jump in barrels from mainstream producers, Vortexa data shows. OPEC+ has been pumping more oil as it unwinds production cuts, increasing production quotas from April to December 2025, and supply is also increasing from non-OPEC exporters like Brazil, Guyana and the U.S.
Sanctioned “Dark” Barrels Surge
But there has also been a surge from sanctioned producers Russia, Iran and Venezuela. The number of “dark” barrels on the ocean has jumped 82% in a year, with a rapid rise in the past three months.
The surge in sanctioned oil comes as the U.S. has imposed new restrictions on Russian and Iranian crude exports, pushing more of this oil into a shadow fleet of tankers that operate outside traditional shipping channels.
Market Implications
The International Energy Agency forecasts surplus supplies of crude oil in global markets will reach about 4 million barrels per day in 2026 as both OPEC+ and other producers increase output while demand growth remains sluggish in most countries.
World oil production will rise by 3 million barrels per day in 2025 to 106.1 million barrels per day and grow by another 2.4 million barrels a day in 2026 to an average of 108.5 million barrels a day. The IEA projects additions to global oil supplies will outpace the growth in demand by about 3.3 million barrels per day in 2026.
Global oil demand will rise only about 710,000 barrels per day in 2026 due to a more challenging economic backdrop. This is well below historical trend, as a harsher macro climate and transport electrification make for a sharp deceleration in oil consumption growth.
Price Impact
Oil prices have been slow to react to the building glut, with the market grappling with whether sanctioned Russian and Iranian cargoes should still be counted as supply. The Financial Times reports the market faces a “super glut” as the supply surge hits prices.
Analysts at Kpler note that “pockets of weakness emerge amid global oversupply,” with bearish fundamentals weighing heavier against the volatile geopolitical landscape.
Bottom Line
The 1.4 billion barrels of oil stuck at sea represents a 24% increase over historical averages and signals a fundamental shift in global oil markets. With OPEC+ unwinding production cuts, non-OPEC producers ramping up output, and sanctioned “dark” barrels surging 82%, the oil glut is likely to persist well into 2026—keeping downward pressure on prices despite geopolitical tensions.
