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The oil market faces a “super glut” next year as a burst of new supply collides with weakness in the global economy, one of the world’s biggest commodity traders has warned.
Saad Rahim, chief economist of Trafigura, said on Tuesday that new drilling projects and slowing demand growth were likely to weigh further on already depressed crude prices next year.
“Whether it’s a glut, or a super glut, it’s hard to get away from that,” Rahim said in remarks alongside the company’s annual results.
Brent crude has fallen 16 per cent this year, on track for its worst year since 2020. Prices are expected to be further damped by major projects coming online next year, including in Brazil and Guyana.
Demand from China, the world’s biggest oil importer, is expected to grow more slowly next year due to its huge fleet of electric vehicles, which have sharply reduced petrol demand. Low prices this year have prompted China to buy more crude to fill its strategic stockpile.
“China needs to keep buying at this rate, for that super glut to not show up even earlier,” Rahim added.
The US government has also been trying to keep oil prices low, and President Donald Trump has pledged to “drill, baby, drill” in a push to increase American production.
Trafigura reported net profits of $2.7bn during the fiscal year that ended in September, down slightly from $2.8bn the previous year — and representing a five-year low after years of bumper profits linked to Russia’s full invasion of Ukraine.
Its non-ferrous metals trading division reported a record year, due in part to the profits made by shipping copper into the US amid the disruptions caused by whipsawing tariff rules, according to people familiar with the matter.
Trafigura chief executive Richard Holtum said “significant headline-driven volatility” had been a major driver for markets this year and that the trend would continue in 2026.
“Trading conditions were not easy last year and our trading team put on a really credible performance across all divisions,” said Holtum.
However, the small drop in profits, combined with rising payouts to Trafigura’s employee-shareholders, meant group equity fell slightly, to $16.2bn, from $16.3bn the previous year — marking the first time this figure has shrunk in almost a decade.
Payouts to Trafigura’s employees rose to $2.9bn, up from $2bn during the prior year. The company, whose top management is based in Geneva, pays out “dividends” to its employee-shareholders, including by buying back the shares of departing employees over time.
The large number of departures among senior Trafigura staff over the past two years has put pressure on the dividend programme, prompting the board to slow the pace of share repurchases.
Ben Luckock, head of oil trading at Trafigura, said in October that he expected oil prices could fall below $60 a barrel before rallying. “I suspect we’ll go into the $50s at some point across Christmas and the new year,” he said at the time.
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