- विज्ञापन -
The global oil market is entering a phase of shifting dynamics, with demand growth losing steam just as supply ramps up, according to the International Energy Agency’s (IEA) May Oil Market Report. Weaker economic activity and record-breaking electric vehicle (EV) sales are putting the brakes on oil consumption, while producers, led by nonOPEC+ countries, continue to boost output. Global oil demand, which grew at a solid pace of 990,000 barrels per day (kb/d) in the first quarter of 2025, is expected to decelerate to just 650 kb/d for the remainder of the year.
On average, demand is projected to grow by only 740 kb/d in 2025 and slightly more—760 kb/d—in 2026. A major factor behind this slowdown is declining demand from OECD countries, with consumption expected to fall by 120 kb/d in 2025 and 240 kb/d in 2026. By contrast, emerging markets and other non-OECD economies will continue to drive demand growth. These regions are forecast to add 860 kb/d of new demand this year, increasing to 1 million barrels per day in 2026, according to the report. While consumption slows, oil producers are not easing off the gas.
Global oil supply is on track to grow by 1.6 million barrels per day (mb/d) in 2025, reaching an average of 104.6 mb/d. Supply is projected to rise further by 970 kb/d in 2026. Non-OPEC+ countries will contribute the lion’s share of this growth, with Brazil, Guyana, and the North Sea bringing large-scale conventional oil projects online. OPEC+, meanwhile, has taken a more aggressive approach by accelerating the rollback of its earlier production cuts. After two consecutive months of increasing quotas, the group is expected to add a net 310 kb/d to global supply this year and an additional 150 kb/d in 2026.
However, the IEA notes that some OPEC+ members face challenges in meeting their higher targets due to limited capacity or the need to compensate for past overproduction. Sanctions enforcement—particularly against Venezuela, Iran, and Russia—could also temper some of the expected gains. On the refining side, global throughput is expected to remain stable at 83.2 mb/d in 2025 and rise slightly to 83.6 mb/d in 2026. Refining margins hit 12-month highs in April, especially in Asia and the Middle East, as narrowing price gaps between heavy and light crude oil improved profitability. All incremental refining activity is occurring outside the OECD, with European refiners struggling under the weight of weak domestic demand and rising carbon compliance costs. Crude inventories are also swelling. Global oil stocks rose by 25.1 million barrels in March, led by a 57.8 million barrel build in crude oil. Total on-land and floating storage stood at 7.67 billion barrels— still below the five-year average by 221 million barrels but rapidly approaching it. The IEA expects stock builds to average 720 kb/d in 2025 and 930 kb/d in 2026.
Mounting inventories are already cooling market sentiment. Some analysts warn that if stockpiles exceed the five-year average by autumn, crude prices could test a floor in the mid-\$50s per barrel—unless OPEC+ slows production or demand stages a surprise rebound. Adding to the complexity, the IEA has cut its forecast for U.S. light-tight oil (LTO) growth by 40 kb/d in 2025 and 190 kb/d in 2026. Total U.S. output is now projected to increase by 440 kb/d this year and only 180 kb/d next year. Looking ahead, the IEA’s already modest demand growth projections face downside risks. A deeper global economic slowdown, continued acceleration in EV adoption—which now tops 18 million units annually—and stricter fuel efficiency standards could further suppress demand. On the other hand, a rebound in manufacturing or an unexpected geopolitical crisis in West Asia could quickly tighten the market once again.
