2025 Oil Market: A Balancing Act Amid Supply Cuts and Rising Demand

The International Energy Agency forecasts a comfortably supplied oil market in 2025, despite OPEC+'s extended supply cuts and rising demand primarily in Asia. Ongoing economic shifts in China are moderating global demand growth, while non-OPEC+ nations, particularly the U.S. and Brazil, are boosting supply.

The International Energy Agency (IEA) predicts a well-supplied oil market in 2025, even as OPEC+ extends its supply cuts. This outlook presents challenges for the oil-producing coalition, which is planning to gradually increase output following years of limiting production due to market conditions.

Despite a softer than anticipated demand largely attributed to China's economic challenges and a move towards electric vehicles, the IEA has raised its 2025 global oil demand forecast to 1.1 million barrels per day. This optimism is bolstered by Chinese economic stimulus measures, driving increased demand across Asian countries.

In contrast, non-OPEC+ countries such as the United States and Brazil are expected to enhance oil supply significantly, potentially influencing future market dynamics. While OPEC+ plans to delay output increases until 2026 due to weaker demand, forecasts indicate a looming surplus that could impact their strategic production adjustments.

(With inputs from agencies.)