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Informist, Thursday, Sept. 11, 2025

 

MUMBAI – The International Energy Agency has once again raised its forecast for growth in global oil supply for both 2025 and 2026, primarily due to the recent production hikes by the Organization of the Petroleum Exporting Countries and its allies, the agency said in its Oil Market Report for September. The agency has also raised its forecast for growth in global oil demand, citing resilient deliveries in advanced economies.

 

The Paris-based intergovernmental organisation expects global oil supply to rise by 2.7 million barrels per day to 105.8 million barrels per day in 2025, 200,000 barrels per day higher than its previous forecast. In 2026, the agency expects global oil supply to rise by 2.1 million barrels per day to 107.9 million barrels per day, also 200,000 barrels per day higher than its last estimate. Global oil demand is now expected to rise by 740,000 barrels per day this year, up from the agency's previous forecast of 680,000 barrels per day.

 

Global oil supply rose to a record 106.9 million barrels per day in August as OPEC and its allies continued unwinding production cuts and supply from non-OPEC nations hovered around record highs. Eight member countries of the group agreed to implement a production hike of 137,000 barrels per day of crude oil in October, citing a steady global economic outlook and current healthy market fundamentals, as reflected in the low oil inventories.

 

IEA says the actual supply boost in October will be less than the target increase as Iraq, the United Arab Emirates, Kuwait, and Kazakhstan are already producing 1.1 million barrels per day of oil above their respective quotas. Similarly other nations such as Russia, "are bumping up against capacity constraints, according to our estimates," it said.

 

As of September, OPEC and its allies would have ramped up actual crude output by 1.5 million barrels per day since Jan-Mar, well below the announced target of 2.5 million barrels per day. The biggest increase has come from Saudi Arabia and other core West Asian producer, it said. "However, tanker tracking data indicate that the majority of the additional volumes have been absorbed by regional refinery activity and power generation use rather than exported out of the region."

 

Growth in oil supply from nations outside OPEC and allies continues apace, with output from the US, Brazil, Canada, Guyana, and Argentina at or near all-time highs, the agency said. These nations are now on track to boost production by 1.4 million barrels per day in 2025 and by just over 1 million barrels per day next year. OPEC and allies are currently expected to add 1.3 million barrels per day of supply this year and 1 million barrels per day next year, on par with non-OPEC nations.

 

"Oil markets are being pulled in different directions by a range of forces, with the potential for supply losses stemming from new sanctions on Russia and Iran coming against a backdrop of higher OPEC+ (OPEC and allies) supply and the prospect of increasingly bloated oil balances," the agency said. "Toughened sanctions on Iran and Russia have so far had a relatively modest impact on supply and trade flows, even as exports from both countries have been trending lower in recent months."

 

Global observed oil inventories rose for the sixth consecutive month in July. Global oil stocks are forecast to rise by an untenable 2.5 million barrels per day on average in the second half of 2025 as supply far outstrips demand, "but there are a number of potential twists and turns ahead – including geopolitical tensions, trade policies and additional sanctions on Russia and Iran – that could yet alter market balances," the agency said.

 

At 1434 IST, the price of Brent crude on the Intercontinental Exchange was 0.5% lower at $67.15 per barrel and WTI crude on NYMEX was 0.6% lower at $63.28 per barrel.  End

 

US$1 = INR 88.44

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

 

Reported by Ashutosh Pati

Edited by Deepshikha Bhardwaj

 

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