IEA hikes global oil demand forecast marginally
Paris-based International Energy Agency (IEA) now expects global oil demand to grow by 740,000 b/d in 2025, about 60,000 b/d higher than its previous estimate.
IMAGE: Oil storage tanks. Getty Images
The year-on-year demand growth of 80,000 b/d in the first half of this year in the OECD group of developed countries has “exceeded expectations,” the IEA said.
The growth in oil demand was supported by “resilient deliveries in advanced economies,” the agency said. Lower oil prices, largely due to production hikes, also helped demand growth, it added.
Despite the uptick in the projected global oil demand, it is expected to remain well below oil production levels, according to the IEA.
“Oil demand typically declines by around 1 mb/d [1 million b/d] from its summer peak through to the end of the year,” the IEA said.
In 2026, global oil demand is estimated to grow by 700,000 b/d, largely unchanged from the agency's last month’s projection.
Supply forecast
Global oil supply has increased in August to a record 106.9 million b/d, about 1.3 million b/d higher than the previous month, the IEA noted in its monthly Oil Market Report (OMR).
The energy agency now projects global oil supply to grow by 2.7 million b/d to average 105.8 million b/d in 2025 and rise by another 2.1 million b/d to average about 107.9 million b/d in 2026.
Of this, non-OPEC+ supply will account for 1.4 million b/d in this year and 1 million b/d in 2026, the agency added.
“Non-OPEC+ oil supply growth continues apace, with output from the United States, Brazil, Canada, Guyana and Argentina at or near all-time highs,” the IEA said.
OPEC+ is currently expected to add about 1.3 million b/d in 2025 and 1 million b/d next year, maintaining similar levels with non-OPEC+ producers.
Earlier this month, eight members of the Saudi Arabia-led alliance raised their October output targets by 137,000 b/d, starting to unwind the second tranche of supply cuts – 1.65 million b/d reduction announced in April 2023.
“If continued at this pace, lifting the full 1.65 mb/d [1.65 million b/d] tranche of cuts would take 12 months,” the energy agency estimated.
However, the actual supply boost planned for next month will be less that OPEC’s target as countries including Iraq, the UAE, Kuwait and Kazakhstan already pump 1.1 million b/d above their quotas, “while others, including Russia, are bumping up against capacity constraints, according to our estimates,” the agency said.
By Aparupa Mazumder
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