Global oil supply is set to grow faster than expected, raising the risk of a market surplus as early as 2026, the International Energy Agency (IEA) said in its latest monthly report as reported by Reuters.
The agency forecast supply to rise by 2.7 million barrels per day (bpd) in 2025, up from a previous estimate of 2.5 million bpd, and by another 2.1 million bpd in 2026. The increase is driven by higher output from OPEC+ members and strong supply growth from non-OPEC producers including the US, Canada, Brazil and Guyana.
While the IEA revised up its 2025 demand growth outlook to 740,000 bpd, it warned that supply is outpacing consumption, with inventories expected to build by an “untenable” 2.5 million bpd in the second half of next year. For 2026, the surplus could reach 3.3 million bpd.
Oil markets remain volatile, the agency noted, citing the risk of geopolitical shocks, trade policies and sanctions on Russia and Iran that could disrupt balances. China’s continued stockpiling has also kept Brent crude in backwardation, with near-term contracts trading higher than later ones.
Brent crude hovered just below US$68 a barrel following the report’s release.
