The phrase "oversupply problem" means that there is too much of a particular thing available, which can create difficulties or challenges. Full definition
The vast majority of the OPEC members were cheating on their production quotas, which caused a major oversupply problem in the world oil market. (netpicksetfinvestor.com)
The main economic goal of the TMX project is to increase netbacks to oil sands producers by avoiding bitumen oversupply problems at Cushing, Oklahoma (also known as «The Pipeline Crossroads of the World») and by providing an option on selling the product into alternative markets in Asia and California. (critical-angle.net)
Further clouding Sorenson's ambitious growth plan is that the looming oversupply problem is particularly acute in Marriott's staple product: select service. (fortune.com)