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Informist, Wednesday, Aug. 13, 2025

MUMBAI – The International Energy Agency has raised its forecast for growth in global oil supply for 2025 and 2026, mainly because of the recent production increases by members of the Organization of the Petroleum Exporting Countries, the agency said in its Oil Market Report for August. The agency has lowered its projections for the growth in demand for this year and next year due to lacklustre demand across the major economies.

The Paris-based intergovernmental organisation expects global oil supply to rise by 2.5 million barrels per day this year, higher than its previous forecast of 2.1 million barrels per day. In 2026, the agency expects global oil supply to increase by 1.9 million barrels per day compared with the rise of 1.3 million barrels per day projected last month. Global oil demand is now expected to rise by 680,000 barrels per day this year, down 20,000 barrels per day from the agency's previous forecast of 700,000 barrels per day. In 2026, it expects global oil demand to increase by 700,000 barrels per day, also 20,000 barrels per day lower than its earlier forecast.

Despite the significant production hikes by OPEC and its allies, non-OPEC countries will continue to lead oil supply growth, adding 1.3 million barrels per day in 2025 and 1 million barrels per day in 2026, bolstered by rising output of US natural gas liquids, Canadian crude and US, Brazilian and Guyanese offshore oil, the agency said. Global oil supply was largely unchanged in July at 105.6 million barrels per day, as a 230,000 barrels per day fall in output from OPEC and its allies was offset by an equal amount of increase in the production from non-OPEC countries.

The downward revision in global oil demand growth is because of tepid demand in major economies, and with consumer confidence still depressed, a sharp rebound "appears remote", the agency said. "Consumption in emerging and developing economies has been weaker than expected, with China, Brazil, Egypt, and India all revised down compared with last month's report," it added.

"Oil prices have been caught in the crosshairs of fast-changing market dynamics," the agency said. While new sanctions on Russia and Iran threaten to impact trade flows, weaker economic growth is poised to temper demand. Benchmark crude oil prices were largely unchanged in July, with Brent crude oscillating around $70 per barrel. However, prices tumbled by $3 per barrel to $67 per barrel after OPEC and its allies announced plans to fully unwind their 2.2 million barrels per day voluntary production cuts by September. At 1453 IST, the price of Brent crude on the Intercontinental Exchange was 0.3% lower at $65.94 per barrel and WTI crude on NYMEX was 0.4% lower at $62.93 per barrel.

Global observed oil inventories rose for the fifth consecutive month in June, up 28.1 million barrels from the previous month, to reach a 46-month high of 7.84 billion barrels, the agency said. "The increase was underpinned by swelling volumes of oil on water, and rising stocks of both Chinese crude and US gas liquids, while other inventories mostly declined," it added.

Global crude refinery runs will approach an all-time high of 85.6 million barrels per day in August, IEA said. Refinery throughputs have been raised for 2025 by 670,000 barrels per day on year to 83.6 million barrels per day and by 470,000 barrels per day in 2026 to 84 million barrels per day, it added.  End

US$1 = INR 87.49

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

Reported by Ashutosh Pati

Edited by Saji George Titus

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