Recent market activity shows a trader has made a substantial bet that Brent crude oil prices will fall below $50 per barrel by year-end. The core thesis behind this position is that oil supply growth will overwhelm geopolitical risk premiums, despite ongoing tensions from Ukraine to the Middle East.

Brokerage and exchange data reveal that Monday witnessed put option trading equivalent to 10 million barrels of Brent crude. The buyer of these 50/49 dollar put spreads stands to profit if February futures contracts drop approximately 25% from current levels of around $68 per barrel by the December 23 option expiry. According to broker sources, after this initial trade was executed early in the week, several other funds began closely monitoring this spread strategy by Tuesday.

This bearish bet reflects a growing consensus among major global energy forecasting institutions that the oil market will face supply oversupply before year-end. Analysts at Macquarie, including Vikas Dwivedi, noted in a report that global oil supply growth driven by both OPEC and non-OPEC producers will result in approximately 3 million barrels per day of excess supply during the fourth quarter of this year and the first quarter of 2026.

Since August, benchmark crude futures have largely traded within a narrow range of less than $5. While oil prices briefly surged above $75 per barrel earlier this year, they have since declined due to two key factors: OPEC's continued push to increase oil production, which has intensified supply pressure, and President Trump's tariff policies that have dampened economic growth and weighed on oil prices.

However, crude futures have rebounded over the past few days as Ukraine has intensified strikes on Russian energy infrastructure. Market expectations of reduced Russian oil exports have pushed futures prices higher, while overall market sentiment has turned slightly more optimistic – with call option premiums exceeding put option premiums for the first time since July.

For the Monday trade, which required an initial investment of approximately $350,000, the potential return could reach up to $10 million if oil prices ultimately fall to $49 per barrel.