Oil supply and demand balances signal that the much-dreaded surplus of July-December 2025 is just a tad higher than the first half. Importantly, the market should be able to absorb these extra barrels as easily as it did in January-June. The shocker, however, is set for the first half of 2026, when demand is seasonally soft and the full weight of Opec-plus' supply additions will hit markets. Predicting this surplus two months ago, the oil futures forward curve dropped into contango — with spot discounted in a sign of oversupply — from November 2025. Sudden fears of Mideast-related supply disruptions have pushed the contango back by a year.