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Informist, Tuesday, Jun. 17, 2025

NEW DELHI – The International Energy Agency has slightly lowered its forecast for growth in global crude oil demand for 2025 to 720,000 barrels per day. The agency has also lowered its forecast for growth in global oil demand for 2026 to 740,000 barrels per day from 760,000 barrels per day in its previous forecast.

The Paris-based autonomous intergovernmental organisation expects world oil supply to rise by 1.8 million barrels per day to 104.9 million barrels per day in 2025 and by 1.1 million barrels per day in 2026, led by growth in nations outside the Organization of the Petroleum Exporting Countries and its allies. The agency expects the oil market to be well supplied this year in the absence of any major disruptions. Global oil supply rose by 330,000 barrels per day in May to 105 million barrels per day. "Monthly gains were evenly split between non-OPEC+ and OPEC+ as the producer alliance started unwinding some voluntary production cuts," the IEA said.

"...while the market looks comfortably supplied now, the recent events sharply highlight the significant geopolitical risks to oil supply security," the IEA said. Crude oil prices surged this month after a rapid escalation in geopolitical tensions as Israel launched a series of air strikes on Iran's nuclear bases. "The two countries have fought a shadow war for decades, but the current conflict is the most severe, with energy infrastructure also targeted for the first time. While there was no impact on Iranian oil flows at the time of writing, fears of a widening regional disruptions to oil traffic through the crucial Strait of Hormuz drove oil prices higher, with Brent crude futures reaching a six-month high of $74/bbl," the agency said.

At 1456 IST, the most-active August Brent crude oil contract on the Intercontinental Exchange was 1.2% higher at $74.14 per barrel and the July West Texas Intermediate crude oil contract on the NYMEX was 1.1% higher at $72.57 per barrel.

Iran has repeatedly threatened to close the key Straight of Hormuz in the past if attacked. Closure of the Strait, even for a limited period, would have a major impact on global oil and gas markets. "The Strait is the exit route from the Gulf for around 25% of the world's oil supply – including from Saudi Arabia, the UAE, Kuwait, Qatar, Iraq and Iran – and most of the world's spare production capacity," IEA said.

The agency expects refinery throughputs to rise by around 460,000 barrels per day in both 2025 and 2026, to average 83.3 million barrels per day and 83.7 million barrels per day, respectively. Refining margins in May were at their highest levels since the first quarter of 2024. However, the rally in crude oil prices in early June squeezed profitability levels as gasoline, naphtha and fuel oil cracks weakened, the agency said.

Global oil stocks rose by 32.1 million barrels in April to 7.72 billion barrels, marking the third consecutive month of increase in stocks. The rise was led by buildup in crude oil inventories in the non-Organisation for Economic Co-operation and Development countries.  End

US$1 = INR 86.25

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Reported by Ashutosh Pati

Edited by Ashish Shirke

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