Oil Defies Glut Forecasts, Rallies 15% on Geopolitical Shocks

Oil prices have rallied approximately 15% year-to-date through February 21, 2026, defying analyst consensus regarding a deep supply glut. Brent crude futures rose despite the International Energy Agency estimating a surplus of 3.7 million barrels per day (bpd) in January. Geopolitical disruptions, including US sanctions on Russian producers and outages at the CPC pipeline, removed over 1 million bpd from the market, tightening physical supply. Additionally, threats to the Strait of Hormuz and stronger-than-expected global demand supported prices. Goldman Sachs maintains a bearish $56 per barrel Brent target for 2026, implying a potential 20% decline, arguing that current prices reflect temporary risk premiums rather than fundamental balances.