Photo: bloomberg
The global oil market may see a surplus of up to 4 million barrels per day (b/d) next year, as OPEC+ countries and other producers increase output while demand remains weak.
According to the updated forecast by the International Energy Agency (IEA), last month’s estimate of a 3.3 million b/d surplus for 2026 has been revised upward. The projected 4 million b/d surplus represents nearly 4% of global demand, exceeding other analysts’ estimates.
The IEA notes that supply is growing much faster than demand. For 2025, oil supply growth has been revised up to 3 million b/d from a previous estimate of 2.7 million b/d, with a further 2.4 million b/d increase expected next year. At the same time, global oil demand growth has been lowered to 710,000 b/d, 30,000 b/d below the previous forecast.
Consumption is expected to remain weak through the rest of 2025 and into 2026, resulting in an annual growth of roughly 700,000 b/d for both years. This is significantly below historical trends due to tighter macroeconomic conditions and transport electrification slowing oil consumption growth.
The IEA’s demand forecasts sit at the lower end of the industry range, anticipating a faster transition to renewables compared with other forecasters, such as OPEC, which expects 1.3 million b/d growth this year—almost double the IEA’s projection.
The agency also highlights that the projected global supply surplus is largely driven by increased output from OPEC+ countries, with additional contributions expected from the U.S., Canada, Brazil, and Guyana next year.
