IEA Adjusts 2026 Global Oil Demand and Supply Forecasts

The International Energy Agency has revised its forecasts, predicting an increase in global oil demand and a narrower surplus in supply for 2026. Global supply is expected to exceed demand by 3.84 million barrels per day, while demand growth is driven by a favorable economic outlook and reduced tariff concerns.

The International Energy Agency (IEA) has updated its oil market projections, raising its 2026 global oil demand forecast while slightly lowering its supply growth outlook. The Paris-based agency now anticipates a global oil surplus of 3.84 million barrels per day, down from the 4.09 million bpd predicted in November.

Revisions were made due to an improved macroeconomic landscape and diminishing tariff anxieties. However, sanctions on Russia and Venezuela are expected to constrain supply growth until 2026. The IEA expects global supply to rise by 2.4 million bpd in the coming year, with significant contributions from non-OPEC+ nations.

A trend of "parallel markets," where crude supply contrasts with constrained fuel markets, is likely to continue amid a limited refining capacity outside China and new EU sanctions on Russian fuel exports. The IEA's outlook remains positive, buoyed by lower oil prices and a weaker U.S. dollar supporting demand in non-OECD countries.

(With inputs from agencies.)