Aug 14, 2025
The International Energy Agency reports that the global oil market appears more 'overloaded' following the OPEC+ increase.
The International Energy Agency (IEA) stated on Wednesday that global oil supply will increase more quickly than anticipated this year and next, driven by higher output from OPEC+ and growth from non-member sources. The IEA revised its supply forecast for 2025 to 2.5 million barrels per day (bpd), up from 2.1 million bpd, with an expected additional rise of 1.9 million bpd next year.
OPEC+ is boosting crude output after deciding to ease output cuts sooner than planned. This increase, alongside concerns about the economic effects of President Trump's tariffs, has pressured oil prices this year. The IEA believes supply is outpacing demand significantly, expecting global oil demand to increase by 680,000 bpd this year and 700,000 bpd next year, both down by 20,000 bpd from prior estimates. The agency mentioned weak demand in major economies and noted that a quick recovery seems unlikely, linking its revised output predictions to higher OPEC+ production goals.
The IEA's demand forecasts are on the low side, anticipating a quicker shift to renewable energy than some others. Meanwhile, OPEC maintained its demand growth forecast at 1.29 million bpd this year, nearly double the IEA's figure. After the IEA's report was released at 0800 GMT, oil prices fell further, with Brent crude trading below $66 a barrel.
The report suggests that supply could outstrip demand by nearly 3 million bpd next year, due to growth from non-OPEC+ producers and limited demand expansion. Despite higher OPEC+ production, non-OPEC countries will lead supply increases this year and next because of rising outputs in the U.S., Canada, Brazil, and Guyana. However, new sanctions on Russia and Iran might restrict supplies from these major producers.
The U.S. imposed new sanctions on Iran last month, and the EU reduced the price cap on Russian oil as part of its sanctions against Moscow. The IEA indicated that market balance may require significant adjustments. Continued stockpiling in China aimed at improving energy security could help absorb the surplus, which has previously supported prices. Despite lowering its demand forecast, the IEA anticipates global crude oil refining rates will reach a record high of 85.6 million bpd in August, following 84.9 million bpd in July. Global refinery throughput is expected to rise by 670,000 bpd to 83.6 million bpd in 2025 and by another 470,000 bpd to 84 million bpd in 2026, fueled by better-than-expected data from OECD market economies and China.
OPEC+ is boosting crude output after deciding to ease output cuts sooner than planned. This increase, alongside concerns about the economic effects of President Trump's tariffs, has pressured oil prices this year. The IEA believes supply is outpacing demand significantly, expecting global oil demand to increase by 680,000 bpd this year and 700,000 bpd next year, both down by 20,000 bpd from prior estimates. The agency mentioned weak demand in major economies and noted that a quick recovery seems unlikely, linking its revised output predictions to higher OPEC+ production goals.
The IEA's demand forecasts are on the low side, anticipating a quicker shift to renewable energy than some others. Meanwhile, OPEC maintained its demand growth forecast at 1.29 million bpd this year, nearly double the IEA's figure. After the IEA's report was released at 0800 GMT, oil prices fell further, with Brent crude trading below $66 a barrel.
The report suggests that supply could outstrip demand by nearly 3 million bpd next year, due to growth from non-OPEC+ producers and limited demand expansion. Despite higher OPEC+ production, non-OPEC countries will lead supply increases this year and next because of rising outputs in the U.S., Canada, Brazil, and Guyana. However, new sanctions on Russia and Iran might restrict supplies from these major producers.
The U.S. imposed new sanctions on Iran last month, and the EU reduced the price cap on Russian oil as part of its sanctions against Moscow. The IEA indicated that market balance may require significant adjustments. Continued stockpiling in China aimed at improving energy security could help absorb the surplus, which has previously supported prices. Despite lowering its demand forecast, the IEA anticipates global crude oil refining rates will reach a record high of 85.6 million bpd in August, following 84.9 million bpd in July. Global refinery throughput is expected to rise by 670,000 bpd to 83.6 million bpd in 2025 and by another 470,000 bpd to 84 million bpd in 2026, fueled by better-than-expected data from OECD market economies and China.