IEA forecasts surge in global oil supply amid accelerated OPEC+ output hikes and shifting demand
London – The International Energy Agency (IEA) has revised its 2025 global oil supply forecast upward, projecting a 1.6 million barrels per day increase, spurred by accelerated output from OPEC+ members, notably Saudi Arabia.
This marks a 380,000 bpd rise from the previous estimate.
According to the IEA’s latest monthly report, the decision by OPEC+ to unwind voluntary production cuts faster than expected is set to increase market supply more rapidly, although the surge comes amid moderate demand growth and growing global economic caution.
IEA projects strong supply growth despite slower demand rise
While the IEA adjusted its global oil demand growth forecast upward slightly—adding 20,000 bpd for a total of 740,000 bpd—the agency highlighted that demand growth is projected to decline to 650,000 bpd in the latter half of 2025. The first quarter had seen much higher growth, averaging 990,000 bpd.
“Signs of a slowdown in global oil demand growth may already be emerging,” the IEA noted, citing macroeconomic challenges and record electric vehicle (EV) sales.
Total demand is expected to average 103.90 million bpd in 2025, a revision from the earlier 103.54 million bpd estimate, with Nigeria and Egypt contributing to the adjusted figures.
Despite the boost in supply projections, the surplus in the global market is expected to rise only marginally—from 710,000 to 730,000 bpd. The IEA’s outlook for 2026 suggests continued supply growth of 970,000 bpd, outpacing demand growth of 760,000 bpd.
U.S. shale, Russia face pressure from lower prices
One notable adjustment in the IEA’s outlook involves the U.S. shale sector, where output expectations were reduced by 40,000 bpd in 2025 and 190,000 bpd in 2026 due to weakened prices.
The IEA anticipates further activity cuts in upcoming quarters, with major shale producers already announcing 14 rig closures.
The Organization of Petroleum Exporting Countries (OPEC) also trimmed its forecast for non-OPEC+ supply growth.
In Russia, April revenues from oil fell to $13.2 billion—the lowest since June 2023—even as production rose by 170,000 bpd to 9.3 million bpd and exports climbed to 7.6 million bpd.
Record electric vehicle sales reshape energy landscape
The IEA reports EV sales are on track to surpass 20 million units in 2025, accounting for one-quarter of all vehicle sales globally.
China alone is expected to contribute 14 million of these sales. The agency has lowered its oil displacement forecast from EVs to 5 million bpd by 2030, down from the previously estimated 6 million bpd.
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In 2024, oil displacement from EVs stood at around 1.3 million bpd. While the transition is accelerating, global oil markets remain in surplus territory for now, driven by strategic output increases from traditional producers.
