The International Energy Agency (IEA) has revised its forecast for global oil supply growth, projecting a stronger-than-expected increase for 2025 and 2026.
The International Energy Agency (IEA) has revised its forecast for global oil supply growth, projecting a stronger-than-expected increase for 2025 and 2026.
Global oil supply growth is now revised up by 370Mb/d to 2.5MMb/d this year and by 620Mb/d to 1.9MMb/d in 2026. This adjustment follows an agreement on Aug. 3 by eight OPEC+ members to raise production by another 547Mb/d in September, fully unwinding the 2.2MMb/d cuts agreed to in November 2023.
OPEC+ crude and NGLs will account for 1.1MMb/d of supply growth this year and 890Mb/d in 2026. Despite these gains, non-OPEC+ producers will continue to lead growth, adding 1.3MMb/d in 2025 and 1MMb/d in 2026, bolstered by rising output from US NGLs, Canadian crude, and offshore oil from the US, Brazil, and Guyana.
Global oil demand growth for 2025 has been downgraded by a combined 350Mb/d since the beginning of the year. Demand is now projected to rise by around 700Mb/d this year and next. The latest data indicate lackluster demand across major economies, with consumption in emerging and developing economies, including China, Brazil, Egypt, and India, revised down.
The market has so far absorbed the additional barrels as refinery activity reached an all-time high. However, global observed oil inventories built by 1.5MMb/d in 2Q25, with Chinese crude stocks rising by 900Mb/d and US gas liquids by another 900Mb/d. Crude and product stocks in major pricing hubs remain below historical averages.
New sanctions on Russia and Iran could curb supplies from the world’s third- and fifth-largest producers. In late July, the US Department of the Treasury announced sanctions aimed at making it more difficult for Iran to sell its oil. Washington is also pressuring major buyers of Russian crude, and the European Union will impose a ban on imports of oil products refined from Russian crude oil starting in January 2026. By contrast, restrictions on Venezuela have been eased, with Chevron recently awarded a new license to operate and export oil.
Oil prices have been volatile, with Brent crude futures hovering around US$70/b in July before slipping to around US$67/b in early August. The report concludes that “something will have to give for the market to balance” as forecast supply increasingly outpaces demand.
By: MexicoBusiness / 08/21/2025
