September 17th, Wall Street has been continuously warning that the oil market may soon face supply oversupply, which will put additional pressure on already depressed oil prices. Goldman Sachs expects that by 2026, as OPEC+ gradually lifts production cuts and output increases in the Americas, the oil market could see a surplus of 1.9 million barrels per day. AUS Global believes this means oil prices could potentially drop to the $50 per barrel range next year, combined with this year's $15 per barrel decline, further intensifying pressure on the oil market.

Meanwhile, energy experts warn that the liquefied natural gas (LNG) market may also face oversupply in the coming years. TotalEnergies CEO Patrick Pouyanné has cautioned that the risk of U.S. LNG oversupply is imminent. Recently, NextDecade, based in Texas, announced that its Rio Grande LNG liquefaction facility Train 4 project has reached a final investment decision (FID), with planned total capacity reaching 48 million tons per year. AUS Global believes that if these expansion plans are completed as scheduled, they could trigger long-term market oversupply.

Pouyanné points out that the United States is building too many LNG facilities, and this concern is not unfounded. Rio Grande LNG's Train 4 has a capacity of approximately 6 million tons per year, bringing total capacity under construction to 24 million tons per year. NextDecade revealed that the Train 5 project is also nearing the final investment decision stage, while Trains 6 through 8 are still under development and approval. Train 4 is expected to require total investment of approximately $6.7 billion, with 40% equity financing and 60% debt financing. TotalEnergies holds a 10% stake in the project. AUS Global believes this high-leverage, high-expansion model may intensify market supply pressure, which also explains why NextDecade's stock price plummeted 18.6% after the news announcement.

Previously, Venture Global's Plaquemines LNG facility officially commenced production in December 2024, completing its first LNG production in just 30 months, making it one of the world's two fastest greenfield projects with a design capacity of 20 million tons per year. Venture Global CEO Mike Sabel stated that these investments not only enhance U.S. LNG export capacity but will also create jobs, support local economies, and provide much-needed LNG supply to global allies. AUS Global believes this demonstrates that the rapid expansion of the U.S. LNG market has profound impacts on the global energy supply landscape, while also bringing potential market oversupply risks.

In this context, Europe has little to worry about regarding the U.S. LNG flood. Over the past few years, Europe has faced pressure to replenish natural gas inventories during summer, with Russian pipeline gas imports declining from over 40% in 2021 to approximately 11% in 2024. To address energy security issues, Europe has actively built new natural gas supply chains, with Norway and the United States gradually replacing Russian gas sources. AUS Global believes that with the rapid growth of U.S. LNG exports, Europe's long-term natural gas supply outlook is favorable: global LNG capacity is expected to increase from 550 billion cubic meters last year to 649 billion cubic meters in 2026, reaching 890 billion cubic meters by 2030. In the first seven months of 2025, U.S. gas exports increased 22% year-over-year to 83 billion cubic meters, and the market will gradually shift from supply-demand balance to oversupply in the coming years.

Overall, AUS Global believes that although oil and LNG markets face price pressure in the short term, the global energy landscape is undergoing profound changes due to U.S. supply expansion. Investors need to monitor supply oversupply risks brought by rapid capacity growth while seizing opportunities from long-term market structural improvements.