IEA cuts global oil demand forecast again
Paris-based International Energy Agency (IEA) now expects global oil demand to grow by 700,000 b/d in both 2025 and 2026, about 40,000 b/d lower than its previous estimate.
IMAGE: Oil storage tanks. Getty Images
Global oil demand growth in this year and 2026 will be “well below historical trend,” amid harsh macro climate and transport electrification aid in decelerating oil consumption, the IEA said.
The petrochemical sector is expected to be the “driving seat” of oil demand growth, as weak economic conditions, increasing vehicle efficiency and robust EV sales pose significant challenges to transport, fuelling demand, according to the IEA.
The projected global oil demand is expected to remain well below oil production levels, the IEA said.
“Amid the backdrop of slower demand growth and a rapid increase in crude supplies, global oil balances have seen a 1.9 mb/d [1.9 million b/d] surplus since the start of the year,” the energy agency added.
Supply forecast
Global oil supply has increased in September to a record 108 million b/d, up by a massive 5.6 million b/d, compared with the same period last year, the IEA noted in its monthly Oil Market Report (OMR).
Of this, OPEC+ accounted for 3.1 million b/d, as the Saudi Arabia-led group unwound 2 million b/d of production cuts, “and as Libya, Venezuela and Nigeria all posted strong gains,” the IEA said.
The energy agency now projects global oil supply to grow by 3 million b/d to average 106.1 million b/d in 2025 and rise by another 2.4 million b/d in 2026.
Of this, non-OPEC+ supply will account for 1.6 million b/d in this year and 1.2 million b/d in 2026, led by production hikes in the US, Brazil, Canada, Guyana and Argentina, the agency added.
OPEC+ is currently expected to add about 1.4 million b/d in 2025 and 1.2 million b/d next year, based on the current production agreement.
Earlier this month, eight members of the Saudi Arabia-led alliance raised their November output targets by 137,000 b/d, starting to unwind the second tranche of supply cuts – 1.65 million b/d reduction announced in April 2023.
By Aparupa Mazumder
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