I keep seeing the argument that oil has entered its terminal decline — and structurally, a lot of it makes sense.
EV adoption is accelerating, especially in China.
Truck electrification is happening far faster than expected.
Renewables are meeting almost all incremental power demand.
Coal share keeps falling year after year.
And yet oil prices aren’t collapsing. They’re sticky.
If fossil demand is already peaking, why does the market still behave like oil is a cyclical asset instead of a melting ice cube?
A few possibilities I’m wrestling with:
- Inventory and storage dynamics delaying price discovery
- OPEC+ acting like a central bank for oil
- Decline rates and underinvestment masking demand erosion
- Or markets simply being slow to price structural shifts
I’ve been digging into this using flows, inventories, and time spreads rather than headlines. I wrote up the full framework and how I’m thinking about 2026 oil here (free): https://open.substack.com/pub/wealthwhispersss/p/the-2026-oil-paradox-geopolitical?r=2sx7z0&utm_campaign=post&utm_medium=web
If you want the follow-up pieces, subscribing is the easiest way to catch them. Genuinely curious how others here are thinking about this, especially anyone close to physical markets or the energy transition.
Source: gstanleycapital
2 Comments
New wells need to be built to maintain current production levels of raw crude and refineries across the world are shutting down/turning into terminals.
What do you mean market broken? Like you are expecting prices to crash because of overproduction?
what do you mean it hasn’t broken? it’s down 23% year to date. that is massive. at these rates many wells are getting shuttered and production is going offline. in addition gas stations are starting to close across many countries.
just today i noticed another one closing near me in addition to the two others that closed last year around me.
we are already at the inflection point where the gasoline distribution infrastructure is declining which will keep consumer prices higher as distribution costs must be supported on the backs of less oil.
terminal decline is happening but because production pulls back and distribution costs increase it doesn’t necessarily translate to a “crash”.