Struyven: Very Focused on Actual Disruptions to Oil Supply

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00:00It's been a busy start to the year for you, I'm sure, in 2026 with all of these geopolitical events going on.

00:06Let me start with Iran. How close are you watching the uprising?

00:10Because so far there doesn't seem to have been an actual physical impact on oil.

00:17Yeah, good morning, Jumana. Definitely a busy start to the year.

00:21Yeah, we're very focused on actual potential disruptions to oil supply from Iran,

00:27which exports just over 2 million barrels per day, which is about 2% of the global supply.

00:33So far, no disruptions. In theory, there are several potential paths to disruptions of barrels.

00:39The increased risk of disruptions to barrels explains why the geopolitical risk premium is back.

00:47We're laser focused on this, but we have not changed our base case.

00:51That's an oversupplied market. We'll see prices trending down.

00:55In a way, we think history in 2026 will repeat itself.

00:59The template of 2025, where we had several geopolitical risk premium spikes,

01:04but an oversupplied market and a downward trend in prices.

01:07Our forecast for 2026, with Brent averaging 56, is similar in that regard to what happened in 2025.

01:17Okay, so almost $8 lower than where we are right now.

01:20I'm going to ask you about the fundamentals in a moment,

01:22but let me just also ask you about the news overnight that Trump is looking to impose a 25% tariff on countries

01:28still doing business with Iran.

01:30We know China is the biggest buyer of Iranian oil.

01:33If he actually follows through with that, and if, by the way,

01:36the Supreme Court actually deemed these tariffs to be legal, which is another big question mark,

01:41could that have a noticeable impact on the oil market in the sense that this Iranian oil will have nowhere to go?

01:49So, in theory, yes, but I think those are two important ifs, two important conditions that you outlined.

01:58I would make two observations.

02:01One, the U.S. administration has imposed similar tariffs on the buyers of Russian oil,

02:09and Russian barrels are still being exported.

02:12That said, if we were, for instance, to see a 50% drop in Iranian exports from about 2 million barrels per day

02:20to 1 million barrels per day, our models would suggest that the fair value of oil prices,

02:25based on the level of inventories, would be, you know, $8 higher,

02:29although things equal after one year.

02:32The actual price effect could be somewhat larger if the risk premium,

02:35a jubilical risk premium, rises further.

02:37But that's another base case, to be clear.

02:38Yeah, yeah, okay, fair enough.

02:42Thank you for giving us the context around the numbers as well.

02:45Let's talk about fundamentals and the fact that you do see Brent averaging $56 this year,

02:50namely on back of a huge surplus that you're forecasting, 2.3 million barrels a day.

02:57Have you started to see these OECD inventory stocks rising significantly in the last quarter of the year?

03:04Yeah, great question.

03:08So, last year, we estimated the market was in a 1.5 million barrels per day surplus,

03:14but only about 200 kbd of those global builds showed up in the OECD commercial pricing centers.

03:21And historically, those inventories, which are more salient, better measured,

03:27especially in the U.S., tend to be more important for price dynamics.

03:31The reason that the builds in the OECD commercial pricing centers have been so limited last year,

03:37despite a large surplus, is a very large rise in oil on water,

03:42both from sanctioned producers such as Iran, Russia, and Venezuela,

03:45but also related to the broad increase of production in places like Brazil and the U.S.

03:53History suggests that once oil and water has surged,

03:58oil and water inventories typically tend to normalize.

04:01We assume slight moderate increases.

04:04We have China buying, stockpiling at a 500 kbd pace,

04:08but if you have a 2.3 million barrels per day surplus on the back of prop-based supply strength,

04:12which is our base case, I think it's reasonable to assume

04:15that about a third of those builds will happen in the OECD.

04:19Our pricing framework is primarily based on OECD builds, but I have an open mind.

04:24Last year, prices trended down, and if you actually plot the downward trend in oil prices in 2025

04:30against basically global stocks inverted, the two lines are very much on top of each other.

04:37So the market may be putting a greater weight on global stocks,

04:40I think, as those have become better measured in an environment

04:44where we can all track with satellite data the builds in global oil markets, not only in the OECD.

04:50Yeah. Okay. Fascinating.

04:53I can't let you go without asking you about Venezuela

04:56and the fact that the Trump administration is obviously very keen

04:59to have these international oil companies invest.

05:02You had the likes of ExxonMobil saying that Venezuela is, quote, uninvestable.

05:07What do you see as the supply actual potential of Venezuela in the coming years?

05:13I mean, how quickly are they going to ramp this up, or do you expect things to get ramped up?

05:20So I would distinguish really two periods.

05:22In the short term, I think there are some low-hanging barrels from Venezuela

05:25that can come back to the market.

05:27In fact, we nudged up our forecast for Venezuelan crude production.

05:31And they're currently producing 800, 900 kbd to 1.1 million barrels per day by the end of this year.

05:37As several companies, including at our GS Energy Conference,

05:40have told markets that with limited investments in existing assets,

05:44with some workovers on their fields,

05:46they can bring some low-hanging barrels back to the market.

05:50In contrast with the long term, where I think it will take a lot of time,

05:54a lot of investment and clarity on the policy context,

05:58both in Venezuela and the U.S., to see more substantial increases.

06:02And so there we have a more cautious forecast.

06:05By 2030, we have Venezuelan crude production only at 1.3.

06:09That's higher than where we are now, but still significantly lower than where we were 20 years ago

06:15when Venezuela produced 4% of global production.

06:18But I think those low-hanging barrels can come back with relatively limited investments.

06:23And I think the U.S. administration is also quite focused on seeing those barrels coming to the market,

06:28in part because they're very attractive for the U.S. refiners

06:30that have been built in an era where Venezuela was a major producer.

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