IEA Trims Forecast on Global Oil Surplus Amid Rising Demand

The International Energy Agency has revised its forecast, projecting a smaller global oil supply surplus for next year due to stronger demand and lower supplies from countries facing sanctions. The report highlights increased demand growth and pauses in output increases by OPEC+ for early 2026.

The International Energy Agency (IEA) announced on Thursday a downward revision in next year's global oil supply surplus forecast, citing improved demand prospects linked to a stronger global economy and reduced oil exports from sanctioned nations.

Despite the downward revision, the surplus remains significant at nearly 3.84 million barrels per day (bpd), driven by increased production from OPEC+ and other major oil producers. The IEA also noted a temporary halt in OPEC+ output hikes for the start of 2026, alongside revised global oil demand growth figures due to an easing of tariff-related worries.

Sanctions on Russian and Venezuelan oil are expected to constrain global supply growth in 2025-2026, while supply issues contribute to a continued discrepancy between crude and refined fuel markets. The report underlines the influence of the ongoing economic recovery and U.S. trade breakthroughs on global oil demand outlooks.

(With inputs from agencies.)