The alarm of excess crude oil supply sounds, traders are betting heavily that the oil price will plummet by 25% by the end of the year.

Recently, a trader made a large bet, believing that by the end of this year, the price of Brent crude oil will fall below $50 per barrel. The core reasoning behind this is that despite ongoing geopolitical risks from Ukraine to the Middle East, the growth in oil supply will outweigh the premium from these risks. Broker and exchange data show that on Monday, there were bearish option trades equivalent to 10 million barrels of Brent crude oil. If by the expiration of the options on December 23, the price of the February futures contract falls by about 25% from the current level of around $68 per barrel, the buyer of the $50/$49 put options will profit. According to a broker, after this trade was made at the beginning of the week, several funds began closely monitoring this price differential strategy on Tuesday. This bet reflects a growing viewpoint from several well-known energy forecasting agencies globally: that the oil market will face oversupply by the end of this year. Analysts including Vikas Dwivedi from Macquarie pointed out in a report that global oil supply growth (driven by both OPEC and non-OPEC oil producing countries) will lead to a daily oversupply of around 3 million barrels in the fourth quarter of this year and the first quarter of 2026. Since August of this year, benchmark crude oil futures prices have mostly traded within a range of less than $5. Although oil prices briefly exceeded $75 per barrel earlier this year, they have since been on a downward trend - on one hand, OPEC continues to push for increased oil production, further exacerbating market supply pressure; on the other hand, the tariff policies implemented by US President Trump have hindered economic growth, putting downward pressure on oil prices, the combination of the two factors leading to the decline in oil prices. However, in the past few days, as Ukraine has increased its attacks on Russian energy infrastructure, crude oil futures prices have rebounded. The market expects a decrease in Russian oil exports, driving up futures prices, and overall market sentiment has slightly shifted towards optimism - since July, the premium for bullish options has exceeded bearish options for the first time. As for the bet made on Monday with an initial investment of about $350,000, if the oil price ultimately falls to $49 per barrel, the potential return could be as high as $10 million.