Global Oil Supply Set to Surge Beyond Expectations: IEA Report

The International Energy Agency (IEA) has raised its global oil supply forecasts for this year and the next, citing increased production from both OPEC+ members and countries outside the group. The IEA now expects supply to rise by 2.5 million barrels per day (bpd) in 2025, an increase from the earlier prediction of 2.1 million bpd. Next year's increase is pegged at an additional 1.9 million bpd, according to the agency's monthly report.

OPEC+ has decided to accelerate the rollout of its production increases, counteracting recent output cuts more swiftly than initially planned. This, paired with economic uncertainties linked to past tariffs, has led to a surplus in the market. The IEA's outlook indicates a lukewarm demand rise of 680,000 bpd this year and 700,000 bpd next year, both slightly reduced from prior estimates. This comes as consumer confidence remains low, paralleling an anticipated swift shift to renewable energy sources.

Brent crude prices suffered further declines following the report's release. The data suggests that next year's supply might outpace demand by nearly 3 million bpd. External contributors from non-OPEC nations such as the U.S., Canada, Brazil, and Guyana will also bolster supply, potentially offset slightly by geopolitical tensions affecting Russian and Iranian exports. The IEA notes that improved stockpiling and energy policies in China could, however, absorb some of the excess supply, stabilizing the market to some extent.

(With inputs from agencies.)