World oil supply will rise more rapidly than previously expected this year and a surplus could expand in 2026 as OPEC+ members and other producers lift output and demand remains sluggish, the International Energy Agency predicted on Tuesday.
Supply will rise by 3.0 million barrels per day in 2025, up from 2.7 million bpd previously forecast, the IEA, which advises industrialised countries, said in a monthly report. Next year it will rise by a further 2.4 million bpd, it said.
OPEC+ is adding more crude to the market after the Organization of the Petroleum Exporting Countries, Russia and other allies decided to unwind some output cuts more rapidly than earlier scheduled. The extra supply has raised concern of a surplus and weighed on oil prices this year.
In the IEA’s view, supply is rising far faster than demand. The agency on Tuesday trimmed its forecast for world demand growth this year to 710,000 bpd, down 30,000 bpd from the previous forecast, citing a more challenging economic backdrop.
“Oil use will remain subdued over the remainder of 2025 and in 2026, resulting in annual gains forecast at around 700,000 barrels per day in both years,” the IEA said in a monthly report.
“This is well below historical trend, as a harsher macro climate and transport electrification make for a sharp deceleration in oil consumption growth.”
IEA demand forecasts are at the lower end of the industry range, as the agency expects a faster transition to renewable energy sources than some other forecasters such as OPEC.
On Monday OPEC maintained its forecast that demand will rise by 1.3 million bpd this year, almost double the rate expected by the IEA, and said the world economy was doing well.
The IEA has been saying the world market looks oversupplied. Tuesday’s report said global oil supply in September was up by 5.6 million bpd from a year ago, with OPEC+ accounting for 3.1 million bpd of the increase.
Next year, the report implied that global supply may exceed demand by about 4 million bpd, due to growth from OPEC+ and producers outside the group such as the U.S., Canada, Brazil and Guyana, and a limited expansion in demand.
That compares to about 3.3 million bpd last month.
(Reporting by Alex Lawler; Editing by Kirsten Donovan and Jan Harvey)