The mystery behind the rebound in crude oil: OPEC+ pauses production increase, war disrupts supply. How do investors view the oil market challenges in 2026?

Recent Oil Price Movements: Supply Concerns Drive Short-Term Rally

As of December 2, 2025, the international crude oil market has shown a noticeable rebound. Brent crude is trading at approximately $63.31 per barrel, and WTI light crude at about $59.50 per barrel, both bouncing back from lows. Behind this rally, there are both policy support and unexpected events fueling the surge.

According to the latest EIA data, U.S. commercial crude oil inventories decreased by 4.2 million barrels, and refining oil stocks also declined, providing fundamental support for higher oil prices. However, trading data indicates that Brent futures have mostly hovered around $63 this month, and market confidence in the continuation of the rally remains uncertain.

OPEC+ Choices: Maintaining Production Is a Pause or a Turning Point?

Faced with a complex global energy situation, OPEC+ recently made an important decision: to maintain current production levels through the first quarter of 2026 without increasing output. This decision provides short-term support for oil prices, preventing a sudden supply increase that could cause prices to collapse.

However, in deeper terms, OPEC+’s “no increase” strategy actually reflects the current market’s conservative expectations—global demand growth is limited, and concerns over oversupply continue to rise. This is not a sign of supply tightening ending, but a defensive move in an environment of weak demand. IHS Markit analysis points out that although prices have risen in the short term, manufacturing and economic momentum in major Asian consumer countries are slowing, which will limit the recovery prospects for crude oil demand.

Geopolitical Risks Trigger Supply Risk Premium

Another key driver behind this round of oil price jumps is a series of supply chain disruptions. Attacks on the Russia-Kazakhstan pipeline alliance (CPC) Black Sea terminal have interrupted critical export channels; U.S. sanctions on Venezuela’s airspace have heightened market fears of supply disruptions from that country; ongoing tensions in Eastern Ukraine and the Russia-Ukraine war have once again brought energy-exporting countries into focus.

These geopolitical events collectively shake market confidence in crude oil supply, creating a short-term supply risk premium that pushes prices higher. However, this risk premium is often temporary and difficult to sustain as a long-term upward driver.

Structural Contradictions: How Far Can the Short-Term Rebound Go?

Despite the recent rise in oil prices, long-term structural issues remain unresolved. Several analysis firms warn that by 2026, the global crude oil market faces oversupply risks. North American shale oil capacity continues to grow, and non-OPEC supply increases are sufficient to offset OPEC+’s production cuts.

Meanwhile, slowing global economic growth, energy transition policies, and increasing competition from renewable energy sources are exerting structural downward pressure on traditional oil demand. Some institutions even predict that if supply and demand fundamentals do not improve, Brent crude could fall to the $30 range by 2027.

This suggests that the current rebound may merely be a “short-term rally” driven by supply concerns, rather than the start of a medium- to long-term bull market. After a short-term surge, oil prices may continue to fluctuate between $50 and $60.

How Should Investors Respond?

In light of multiple risks heading into 2026, investors need to stay highly vigilant. OPEC+’s strategic adjustments, geopolitical developments, global economic demand trends, and energy transition progress will all influence oil price volatility and structural shifts.

It is recommended that market participants continuously monitor supply-side changes and geopolitical situations, while avoiding viewing this rally as a confirmation of a long-term bullish trend. In an environment where supply and demand fundamentals have yet to improve, cautious responses remain the rational choice.