Global Oil Surplus Looms as 2025 Demand Forecast Dips

The International Energy Agency reports a potential surplus in global oil supply of 600,000 barrels per day this year after revising its 2025 demand growth forecast downward. The surplus might grow if OPEC+ continues excessive production. Demand growth is significantly influenced by Asia's oil consumption.

The International Energy Agency (IEA) forecasts that global oil supply could surpass demand by about 600,000 barrels per day this year. This projection follows a downward revision of the 2025 demand growth outlook, as detailed in the IEA's monthly oil market report released on Thursday.

The report suggested that the surplus might expand by an additional 400,000 bpd if OPEC+ continues to ease output cuts and fails to control overproduction relative to set quotas. The adjusted 2025 demand estimate, reduced by 70,000 bpd to approximately 1 million bpd, points to Asia, notably China's petrochemical sector, as the primary driving force.

Furthermore, the IEA noted lower-than-anticipated demand for the last quarter of 2024 and the first quarter of this year amidst an unpredictable macroeconomic environment. The introduction of new U.S. tariffs and ensuing retaliatory actions have intensified macroeconomic risks, leading to a marginal downgrade in oil demand growth estimates for 4Q24 and 1Q25.

(With inputs from agencies.)