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Informist, Tuesday, Apr. 15, 2025

MUMBAI – The International Energy Agency has lowered its forecast for growth in global oil demand in 2025 by 300,000 barrels per day to 730,000 barrels per day as escalating trade tensions have negatively impacted the economic outlook. The agency expects growth in global oil demand to further slow down to 690,000 barrels per day in 2026.

The agency has lowered its forecast for growth in global oil supply by 260,000 barrels per day to 1.2 million barrels per day, due to a fall in production in the US and Venezuela. Production in 2026 is set to rise by 960,000 barrels per day, with offshore projects taking the lead, the energy watchdog said in its April Oil Market Report on Tuesday.

In March, global oil supply rose by 590,000 barrels per day to 103.6 million barrels per day, up 910,000 barrels per day from the corresponding period last year. The growth in supply was led by nations outside the Organization of the Petroleum Exporting Countries and allies, the report said. The agency expects supply growth from non-OPEC countries to remain robust at 920,000 barrels per day in 2026. Brazil, Guyana, and Canada will be the other major sources of growth, with their supply rising by 240,000 barrels per day, 160,000 barrels per day, and 120,000 barrels per day, respectively, it said.

"Global crude runs are forecast to average 83.2 million barrels per day this year, as demand growth expectations cut the projected annual increase by 230,000 barrels per day to 340 barrels per day," the agency said. In 2026, throughputs are set to rise by 360,000 barrels per day to 83.6 million barrels per day.

Global observed oil stocks rose by 21.9 million barrels to 7.65 billion barrels in February, but inventories still hovered near the bottom of the five-year range. Crude, natural gas liquids, and feedstocks surged by 41.2 million barrels, of which the Organisation for Economic Co-operation and Development onshore stocks accounted for 14.1 million barrels, the agency said. "Preliminary data indicate global oil stocks increased further in March, led by crude builds in the non-OECD and oil on water," it added.

Earlier in April, eight member nations of OPEC and its allies agreed to increase production by 411,000 barrels per day in May. However, IEA said that the actual increase in output may be much lower as a number of countries including Kazakhstan, the United Arab Emirates, and Iraq are already producing well above their targets. "Notably, Kazakh crude oil output reached a record high of 1.8 million barrels per day following the start-up of the Chevron-operated Tengiz oilfield expansion project. This puts Kazakhstan some 390,000 barrels per day above its OPEC+ output quota," it said.

Global oil prices tumbled by around $10 per barrel in March and early April as risk sentiment soured in the wake of proliferating US tariffs and mounting recession fears. The decision by some members of OPEC and allies to accelerate the unwinding of extra voluntary production cuts added to the bearish momentum, it said. "With arduous trade negotiations expected to take place during the coming 90-day reprieve on tariffs and possibly beyond, oil markets are in for a bumpy ride and considerable uncertainties hang over our forecasts for this year and next," the agency said.  End

US$1 = INR 85.77

Reported by Ashutosh Pati

Edited by Ashish Shirke

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