Global oil supply is expected to rise faster than previously forecast in 2025 and 2026, driven by increased output from OPEC+ and growing production outside the group, according to the International Energy Agency (IEA) report.
The agency now projects global oil supply will climb by 2.5 million barrels per day (bpd) in 2025, up from an earlier estimate of 2.1 million bpd, and by 1.9 million bpd in 2026. OPEC+ nations, including Saudi Arabia and Russia, along with non-OPEC producers such as the U.S., Canada, Brazil, and Guyana, are leading the expansion, Reuters news report said.
Despite rising supply, global oil demand growth has been downgraded, with the IEA forecasting an increase of 680,000 bpd in 2025 and 700,000 bpd in 2026, slightly below earlier projections.
Weak demand from major economies, including China, India, Brazil, and Egypt, has been offset only partially by strong aviation fuel consumption, which reached record highs in the U.S. and Europe. OECD demand remains flat, with Japan at multi-decade lows, while non-OECD countries continue to drive growth.
Global crude runs are approaching all-time highs, with refinery throughput projected at 85.6 million bpd in August 2025 and annual averages of 83.6 million bpd in 2025 and 84 million bpd in 2026.
Strong refining margins, particularly in OECD countries and China, support these record rates. Observed oil inventories have risen for five consecutive months, driven by Chinese crude stockpiling and U.S. gas liquids, although OECD industry stocks remain near decade-lows.
Oil prices have responded to these market dynamics, hovering around $70 per barrel in July before falling to $66–$67 per barrel in early August after OPEC+ announced plans to fully unwind voluntary output cuts.
Geopolitical factors, including new U.S. sanctions on Iran and EU restrictions on Russian crude, could curb future supplies, while eased restrictions on Venezuela may add output. Analysts warn that supply could exceed demand by nearly 3 million bpd next year, keeping oil markets under pressure despite short-term absorption through refinery activity and Chinese stockpiling.
The IEA outlook signals that global oil markets will need to adjust rapidly to balance rising supply with subdued demand, even as long-term transitions toward renewable energy continue to shape global consumption patterns.
GreentechLead.com News Desk