VINACHEM

Global oil supply is anticipated to grow at a faster pace than previously estimated this year and a surplus is tipped to expand even further in 2026 thanks in part to increased OPEC+ output and "subdued" demand, according to a monthly report from the International Energy Agency.

In its Oil Market Report for October, the IEA said that world oil supply is on pace to rise by 3 million barrels per day to 106.1 million bpd in 2025. It had previously forecast a jump of 2.7 million bpd. Next year, supply is seen growing by a further 2.4 mbpd, the IEA added.

Oil supply around the world in September came in at 5.6 million bpd versus a year earlier, much of it stemming from output from the Organization of the Petroleum Exporting Countries and its allies. The producer group, known as OPEC+, has been unwinding some output reductions more rapidly than it had previously planned, raising worries over a global supply glut that has broadly dented oil prices this year.

Meanwhile, oil demand growth is seen by the IEA at 710,000 bpd this year, compared to an earlier estimate of 740,000 bpd.

"[O]il use will remain subdued over the remainder of 2025 and in 2026, resulting in annual gains forecast at around 700,000 bpd in both years," the IEA wrote, adding that this is "well below historical trend."

A "harsher" economic climate and an ongoing transition to renewable energy sources were cited as causes behind a potential "sharp deceleration in oil consumption growth."

The outlook comes after the Organization of the Petroleum Exporting Countries, or OPEC, reiterated its forecast for oil demand expansion of 1.3 million bpd this year and described the global economy as largely robust. OPEC’s demand estimate is nearly double that offered by the IEA.

Factoring in its supply and demand projections, the IEA’s report implies that global supply could outstrip demand by roughly 4 million bpd in 2026.