Oil Collapsed Below The Psychological Mark

The market collapsed the Kremlin's plans.

World oil prices continue to decline. The cost of Brent fell to $59.96 per barrel, falling below the key $60 mark for the first time since May. U.S. West Texas Intermediate crude was trading near $56 per barrel. This was reported by Bloomberg.

The drop deepened the market's annual losses and sent another signal that oil supply is steadily overtaking demand, a gap that analysts estimate will persist into next year.

The network reminds that the collapse of oil prices more than 30 years ago led to the collapse of the Soviet Union.

Oil oversupply and weak demand

The main reason for the drop in prices is a surplus of oil on the market. New volumes are coming from OPEC+ countries and the Americas, while demand growth remains subdued.

It is this imbalance that is consistently pulling prices down in 2025. It's a blow to Russia Kpler analyst Humayun Falakshahi said in comments to Reuters that it's no longer so much about crude oil volumes (Russia is already actively exporting it), but rather a decline in attacks on infrastructure and rising supplies of oil products, especially diesel. This increases pressure on refining margins and hits exporters' revenues.

In other words, even without increasing production, Moscow is losing money due to the deteriorating market conditions.

Russia will have money problems

It's even worse for Russian oil. The discount is now playing a big role. After the fall sanctions, it went from $12 to $20. But the price of Brent also plays its role: the cheaper Brent, the cheaper Urals.

According to Falakshahi, oil is now so plentiful that even a sharp reduction in exports of one of the producers will not cause a jump in prices.

Moreover, in the medium term Venezuela can strengthen supplies. The country has the world's largest oil reserves, even larger than Saudi Arabia's.

In case of regime change, lifting of sanctions and return of Western companies, production may increase by 200-300 thousand barrels per day within a year, and in four-five years - by more than 1 million barrels per day.

The forecasts remain gloomy

Goldman Sachs is looking at the market even tougher: the bank allows prices to fall to $50 per barrel in 2026. It estimates that the oil glut will average 1.8 million barrels per day next year, leading to an increase in global inventories of nearly 800 million barrels by the end of 2026.

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