Global Oil Surplus Looms as U.S. Production Soars

The International Energy Agency (IEA) predicts a global oil supply surplus, led by the United States, despite sanctions on Russia and Iran. OPEC+ faces challenges balancing the market as trade tensions impact demand. Asian growth, particularly in China, will drive demand recovery amid robust U.S. production.

The International Energy Agency (IEA) has announced an expected global oil supply surplus of 600,000 barrels per day (bpd) this year, largely driven by record U.S. production levels. This forecast persists despite ongoing U.S. sanctions targeting key exporters Russia and Iran.

Asian countries, notably China, are anticipated to lead demand growth, even as the global market experiences headwinds from rekindled trade tensions between nations like the United States and its trading partners. Notably, Asian petrochemical feedstocks will power substantial demand increases.

OPEC+, struggling with supply management, faces a complicated year, as members ease production cuts in response to robust supply growth. While global supply relies heavily on non-OPEC producers like the U.S., Canada, Brazil, and Guyana, proposed U.S. tariffs on North American oil could impact market flows.

(With inputs from agencies.)