IEA Sees Global Oil Market Surplus in 2025 on Declining Demand

Global oil supply could exceed demand by around 600,000 barrels per day this year, the International Energy Agency has said, due to growth led by the United States and weaker than expected global demand.

The outlook of ample supplies despite sanctions on major exporters Russia and Iran highlights the challenge for for the Organisation of Petroleum Exporting Countries (OPEC) plus Russia and other allies, in balancing the market.

Last month, the IEA had suggested a slightly narrower surplus of around 500,000 bpd, according to Reuters calculations based on the agency’s data.

World oil demand is now expected to rise by 1.03 million bpd in 2025, the IEA said, down 70,000 bpd from last month’s forecast, with growth driven largely by Asia and specifically China.

“Asian countries will account for almost 60 per cent of gains, led by China where petrochemical feedstock will provide the entirety of growth as demand for refined fuels reaches a plateau,” it said.

Growing consumption of petrochemical feedstock, the IEA added, accounts for almost all demand growth gains since the COVID-19 pandemic.

The report highlighted the headwinds OPEC+ faces this year as growing global trade tensions could impact demand against a backdrop of robust supply growth.

OPEC+ decided earlier this month to start unwinding its most recent layer of output cuts from April. The 2025 surplus could grow by a further 400,000 bpd if OPEC+ extends its unwinding of cuts and fails to rein in overproduction,” the IEA said.