IEA Warns of Looming Oil Supply Glut as OPEC+ Increases Output

 

🛢️ IEA Warns of Looming Oil Supply Glut as OPEC+ Increases Output

The International Energy Agency (IEA) has forecast that global oil markets could face a supply surplus of nearly 4 million barrels per day (bpd) in 2025, as OPEC+ and other major producers ramp up output more quickly than global demand is growing.
Source: Reuters

According to the IEA’s latest Oil Market Report, the increase in supply stems mainly from Saudi Arabia, Russia, the United States, and Brazil, with total global production expected to reach 105 million bpd by mid-2025.

In contrast, demand growth is slowing, projected to rise by only 1.1 million bpd next year, as efficiency gains, the electric-vehicle boom, and slowing industrial activity weigh on consumption.

The report said this mismatch could lead to inventory buildups and downward pressure on prices, especially if global economic growth slows further.

Brent crude prices, which had traded near $87 a barrel earlier this month, slipped to $82 following the report’s release — signaling trader concerns about oversupply.

🏭 Broader Market Context

• The forecast follows OPEC+’s October decision to modestly raise output quotas by 137,000 bpd for November, continuing its cautious but steady production expansion.

• Meanwhile, U.S. shale production remains strong, with new well productivity offsetting recent rig declines.

• China’s oil demand, once the main global driver, is expected to plateau as its economic recovery slows and renewable-energy adoption accelerates.

• The IEA cautioned that the “glut” could strain relations within OPEC+, as some members may face revenue shortfalls and renewed calls to cut output.