Oil Oversupply Looming: IEA Warns of Imbalance by 2025

The International Energy Agency predicts that global oil supply will surpass demand by 2025, with a surplus over 1 million barrels per day. This projection comes amidst ongoing OPEC+ cuts and sluggish demand growth, influenced by economic conditions and a pivot to cleaner energy technologies.

The International Energy Agency (IEA) projects an oversupply in the global oil market by 2025, even with current OPEC+ production cuts in place. In its latest monthly report, the IEA forecasts a supply surplus exceeding 1 million barrels per day, fueled by growing output from countries like the United States and Canada.

This anticipated oversupply stems from sluggish demand growth, with the IEA maintaining a nearly unchanged oil demand increase of 990,000 barrels per day for next year. Meanwhile, non-OPEC+ production is expected to rise substantially, driven by key players across the Americas.

OPEC has revised its oil demand forecasts downward due to downturns in China and India. The IEA also cites the shift towards cleaner energy technologies as a factor slowing oil demand growth. The agency made slight adjustments to its 2024 forecast, raising expectations due to unexpected gasoil consumption in OECD nations.

(With inputs from agencies.)