IEA Lowers 2026 Oil Surplus Forecast to 3.84M Bpd


   
Karim Bastati
DTN Analyst

   VIENNA (DTN) -- The International Energy Agency in its latest monthly oil 
report published Thursday (12/11) revised downward its oil surplus forecast for 
next year on an improved macroeconomic outlook and biting sanctions on Russian 
and Venezuelan oil. The Paris-based energy watchdog still expects global oil 
supply to far exceed demand next year.

   IEA once again lifted its global demand growth forecast amid easing trade 
tensions and improved economic conditions. The agency pegs global oil demand 
growth at 830,000 bpd this year and forecasts 860,000 bpd for 2026, saying it 
expects petrochemical feedstocks to be the main driver.

   Global supply fell for a second month in a row, spearheaded by sanctions-hit 
lower Russian supplies. That led IEA to cut oil supply growth estimates for 
this year and next by 100,000 bpd and 20,000 bpd, respectively. Together with 
higher growth expectations, these revisions lowered the prognosticated 
oil-overhang next year to 3.84 million bpd, down from 4.09 million bpd in the 
November IEA report.

   Prolonged unplanned production outages in Kuwait and Kazakhstan and 
dwindling output of sanctioned Russian and Venezuelan oil also led the agency 
to cut surplus expectations for the fourth quarter of this year.

   Still, global observed inventories in October expanded the ninth consecutive 
month to a four-year high, and preliminary data suggested the same was true 
last month. Stock builds averaged 1.4 million bpd in October, and 1.2 million 
bpd in the first ten months of the year.

   Refinery outages and a looming EU import embargo for refined products made 
from Russian crude oil led refining margins to a 3-year high last month. Given 
ample crude oil supply and limited spare refining capacity outside of China, 
the IEA expects this divergence between oil and product prices to continue well 
into 2026.




(c) Copyright 2025 DTN, LLC. All rights reserved.