The surplus on the oil market next year will be even higher than previously expected, the International Energy Agency (IEA) said on Thursday, as it raised both its demand and supply growth estimates.
“Global oil market balances are looking increasingly lopsided, as world oil supply is forging ahead while oil demand growth remains modest by historical standards,” the IEA said today in its closely-watched monthly report on the oil market.
The agency revised up slightly its 2025 demand growth estimate, to 790,000 barrels per day (bpd), up from 700,000 bpd growth expected in the October report. For 2026, the IEA also sees modest demand growth of 770,000 bpd, slightly higher compared to 700,000 bpd growth expected last month.
Supply, however, continues to grow steadily and inventories are rising, the IEA warns.
Global oil supply has jumped by a massive 6.2 million bpd since January, with gains divided evenly between non-OPEC+ and OPEC+. World oil supply is set to rise by 3.1 million bpd in 2025 and 2.5 million bpd in 2026. Non-OPEC+ supply is expected to account for 1.7 million bpd and 1.2 million bpd of the growth, respectively, according to the IEA.
The agency’s latest supply and demand estimates imply that the surplus next year would be 4.09 million bpd, up from an implied 3.97 million bpd surplus expected in the October report.
The IEA, however, noted that “risks to the forecast remain plentiful, with the economic repercussions of the recent tariff turmoil and the US federal government shutdown still uncertain, and the impacts of new sanctions on Russia yet to become clear.”
Earlier this week, OPEC said in its own market report that it now sees the market broadly balanced in 2026, ditching an earlier forecast of a deficit. The view dragged oil prices down as the market fears an imminent glut.
By Tsvetana Paraskova for Oilprice.com
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