IEA Warns of Global Oil Surplus as Demand Softens
Global / Energy Sector – The International Energy Agency (IEA) has revised its forecast, predicting a larger global oil supply surplus in 2025-26. Increased output from OPEC+ together with non-OPEC producers like the U.S., Brazil, Canada and Guyana is pushing supply ahead of demand.
Key details:
Expected supply increases: +2.7 million barrels per day (b/d) in 2025, and +2.1 million b/d in 2026. Demand growth is forecasted at 737,000 b/d in 2025 and 698,000 b/d in 2026—both numbers lower than earlier projections.
External factors like sanctions on Russia and Iran are present, but not yet disrupting supply at scale. However, upcoming bans on some refined Russian products in the EU may shift trade flows.
Price pressure is cushioned somewhat by geopolitical instability (e.g. in the Middle East) and expectations of regulatory changes.
Why It Matters:
An oil surplus tends to push down global energy prices, which can reduce revenues for oil-exporting countries (many of which are developing nations). Conversely, consumers benefit via cheaper fuel. Also, in a time when many countries are trying to transition to renewable energy, the dynamics of oil surplus vs demand signal how difficult that transition may be in practice.
