Key Moments
- The International Energy Agency raised its global oil demand outlook for 2025 and 2026 while lowering its supply growth projections.
- World oil supply declined by 610,000 b/d in November, with OPEC+ responsible for more than three-quarters of the drop.
- The IEA now estimates a 3.815 million b/d supply surplus in 2026, still a record but 231,000 b/d smaller than previously projected.
IEA Upgrades Demand Outlook for 2025 and 2026
The International Energy Agency (IEA) has increased its forecast for global oil demand in the coming years, pointing to a stronger macroeconomic and trade environment. According to the agency, world oil consumption is expected to expand by 830,000 barrels per day (b/d) in 2025. The IEA also revised its 2026 demand outlook higher by 90,000 b/d, projecting year-on-year growth of 860,000 b/d.
The agency noted that “Recent strength in U.S. gas liquids demand has been largely offset by persistent weakness in Europe and accelerated substitution away from oil in power generation in the Middle East.”
Supply Growth Expectations Reduced
On the supply side, the IEA lowered its forecasts for global oil supply growth, contributing to a narrower projected surplus for 2026. The agency cut its estimate for supply growth in 2025 by 100,000 b/d to 3 million b/d, and trimmed its 2026 supply growth outlook by 20,000 b/d to 2.4 million b/d.
| Year | Change in Global Oil Supply (b/d) | Total Global Oil Supply (million b/d) |
|---|---|---|
| 2025 | 3,000,000 | 106.2 |
| 2026 | 2,400,000 | 108.6 |
The IEA now projects total global oil supply at 106.2 million b/d in 2025 and 108.6 million b/d in 2026.
Recent Production Dynamics and Sanctions Impact
Global oil supply fell by 610,000 b/d in November. The Organization of the Petroleum Exporting Countries and its allies (OPEC+) accounted for more than three-quarters of this decline, with the largest reductions coming from Russia and Venezuela, which are subject to sanctions.
“Russia’s total oil exports fell by roughly 400,000 b/d in November to 6.9 million b/d, as buyers assessed the implications and risks associated with more stringent sanctions,” said IEA, in a monthly report.
2026 Surplus Forecast Narrowed but Still at Record Level
Despite the more modest supply growth outlook, the IEA still expects world oil supplies to outpace demand in 2026. The agency now anticipates a surplus of 3.815 million b/d in that year. While this would represent a record supply excess, it is 231,000 b/d lower than the agency’s previous estimate.
| Metric | 2026 Projection | Change vs Previous Estimate |
|---|---|---|
| Supply-Demand Surplus (b/d) | 3,815,000 | -231,000 |
Inventory Levels Reach Multi-Year Highs
The IEA reported that global observed oil inventories climbed to their highest level in four years in October. Preliminary figures for November suggest that stockpiles continued to build, driven primarily by an increase in non-OECD on-land crude inventories.
The report underscores a market backdrop characterized by rising demand, moderated supply growth, and elevated inventory levels, feeding into the agency’s view of a still-substantial – but slightly reduced – global surplus in 2026.
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