Global Oil Supply to Outpace Demand

The International Energy Agency (IEA) predicts a significant increase in global oil supply, expecting a growth of 2.5 million barrels per day (bpd) this year and 1.9 million bpd in 2026, reaching a peak of 105.6 million bpd by July. This surge is primarily fueled by non-OPEC+ producers.

OPEC+ Adjustments and Demand Projections

OPEC+ is set to gradually remove 2.2 million bpd of voluntary cuts by September, starting with an addition of 547,000 bpd next month. Meanwhile, demand forecasts have been consistently downgraded, now anticipating a modest annual rise of just 700,000 bpd through 2026, attributed to slow consumption in key markets like China, India, and Brazil.

Market Implications

With OECD demand stagnating and jet fuel consumption reaching unprecedented levels in the US and Europe, the IEA cautions against a potential oversupply. Without immediate measures to curb supply or stimulate demand, the market faces the risk of becoming excessively saturated by next year.