Global Oil Supply Surplus Predicted as Demand Softens

The International Energy Agency projects a global oil supply surplus of 600,000 barrels per day this year, which could increase if OPEC+ continues its output cuts unwinding. The IEA revised its 2025 demand growth forecast down due to escalating trade tensions, impacting oil market balance strategies.

The International Energy Agency (IEA) has forecasted a 600,000 barrels per day surplus in global oil supply for the current year, according to its latest monthly report. This potential oversupply situation arises after a downward revision of the agency's 2025 demand growth forecast.

The IEA's previous report anticipated a slightly lower surplus of around 500,000 barrels per day. Weighing heavily on the revised forecasts are escalating global trade tensions, which are expected to affect demand considerably, particularly during the fourth quarter of 2024 and the first quarter of 2025.

The agency noted that supply growth is expected to double in 2025, with OPEC+'s managed production cuts playing a critical role. However, due to overproduction in some member states, actual supply gains from these cuts may be limited, spotlighting the challenge of balancing supply and demand amid fluctuating macroeconomic conditions.

(With inputs from agencies.)