Oil supply to exceed demand by over 1m barrels a day in 2025

Global oil supply will exceed demand by more than one million barrels a day next year, the International Energy Agency says.
In its monthly oil market report, the IEA said that even if the Opec+ cartel of oil-producing countries keeps its cuts in place, rising production in the United States and other outside producers would outpace sluggish demand thanks to “below-par” underlying global economic conditions and the deployment of clean energy technology.
Earlier this month, eight members of Opec+, which includes the Organisation of the Petroleum Exporting Countries along with Russia and other nations, said they would prolong production cuts by another month, having previously said they would raise output by 180,000 barrels a day in December.
The IEA forecast that world oil demand would grow by 990,000 barrels a day in 2025, to 103.8 million barrels. At the same time, it expected non-Opec+ producers alone to boost supply by roughly 1.5 million barrels a day in both 2024 and 2025.
The slowdown in China’s economy has been the main drag on demand, the IEA said, with growth this year expected to average just a tenth of the 1.4 million barrels a day increase seen in 2023. The group added that Chinese demand has fallen for a sixth consecutive month in September.
At the same time, following the election of Donald Trump, the agency expects the United States to lead non-Opec+ supply growth, with higher output also forecast from Canada, Guyana and Argentina.
Brazil, which was plagued by unscheduled outages and operational underperformance this year, is also expected to be a major source of oil production growth in 2025.
Oil prices traded slightly weaker after the report was released, with Brent crude trading below $73 a barrel.
The IEA provides policy advice to member states to support their energy security and advance their transition to clean energy. While the Paris-based agency left its 2025 oil demand growth forecast little changed at 990,000 barrels a day, it did make a slight upward adjustment to its 2024 oil demand growth forecast, raising it to 920,000 barrels a day thanks to higher than expected gasoil demand.
Gasoil has a number of uses and can be employed as a boiler fuel in industrial or agricultural installations, and is also used by diesel engines in equipment such as farm tractors, railway and marine engines.
Forecasts on the strength of demand growth in 2024 have varied widely, partly due to differences in demand expectations for China. The IEA’s view is at the lower end of industry estimates.
Opec, which is more bullish than other forecasters, cut its demand growth estimates on Tuesday for 2024 and 2025 but still expects much more rapid growth than the IEA. It predicted growth in demand of 1.82 million barrels a day in 2024 and 1.54 million barrels in 2025.