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Non-OPEC+ crude exports hit a record 16 mbd in March 2025, led by Brazil, Colombia, the UK, and Canada, while US exports stagnated below 4 mbd.
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OPEC+ plans to increase production by 411,000 bpd in May, contributing to fears of oversupply and causing Brent crude to drop below $65/bbl.
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Crude inventories are rising globally due to weak Atlantic Basin demand, refinery maintenance, and longer shipping routes to Asia.
The crude oil market is entering a new phase of pressure as non-OPEC+ exporters reached an all-time high of nearly 16 million barrels per day (mbd) in March 2025. This 6% monthly rise marks a significant departure from the plateau observed throughout most of 2024. The increase is primarily driven by ramped-up exports from Brazil, Colombia, and the UK in the Atlantic Basin, along with West Coast Canadian shipments via the TMX pipeline. In contrast, the US—previously the main engine of non-OPEC+ growth—has seen stagnation and a slight decline in early 2025, with export levels holding below 4 mbd, according to Breakwave Advisors.
Eastern Demand Temporarily Offsets the Imbalance
Despite the rapid supply growth, demand from Asian importers has so far helped absorb the excess. Following sanctions introduced by the US Treasury’s OFAC in January targeting vessels carrying sanctioned oil from Russia, Iran, and Venezuela, buyers in India, China, and other Asian countries rushed to secure alternative supplies. Though the sanctioned flows continue largely uninterrupted, newly purchased long-haul barrels are now arriving in Asia, supporting near-term demand.
Inventory Builds and Rising Oil on Water
The Atlantic Basin has seen a slowdown in crude demand, largely due to tighter refining margins and seasonal spring refinery maintenance. This has contributed to a build-up in onshore inventories, while crude in transit has also increased due to longer shipping routes from the Atlantic to the Pacific regions. Since mid-February, global crude markets have lengthened by 120 million barrels, adding downward pressure on prices. With Brent crude already below $65, current levels may encourage Chinese buyers to stockpile further, pushing stock levels above seasonal averages during Q2.
OPEC+ Unwinds Production Cuts, Adding to Bearish Outlook
The bearish tone deepened after OPEC+ announced on April 3rd that it would begin unwinding voluntary production cuts. Starting in May, the group plans to increase crude output by 411,000 barrels per day. This unexpected move triggered a sell-off in global markets, further depressing prices. While OPEC+ has hinted at the possibility of reversing the increase if conditions worsen, a notable reduction in Saudi official selling prices suggests a strategic move to regain market share in Asia. This could further strain internal OPEC+ compliance and intensify global oversupply concerns.
As the crude oil market faces the twin forces of record supply and easing production restraint, volatility is expected to persist, with significant implications for pricing and strategic stockpiling throughout the second quarter.
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Source: Breakwave Advisors
