The International Energy Agency lifted its 2026 global oil demand growth forecasts while trimming its supply growth predictions in its latest monthly oil market report, anticipating a slightly narrower surplus next year.
The Paris-based agency expects global oil supply to exceed demand by 3.84 million barrels per day, compared with a 4.09 million bpd surplus estimated in its November report.
The IEA revised up its global oil demand growth forecasts for this year and next because of an improving macroeconomic outlook and "anxiety about tariffs having largely subsided".
The agency expects supply growth to be slightly lower than previously anticipated in 2025-2026, as sanctions on Russia and Venezuela hit exports.
Meanwhile, the IEA sees a trend of "parallel markets", where ample crude supply is ?juxtaposed with tight fuel markets, persisting for some time, amid limited spare refining capacity outside China and fresh EU sanctions on Russian crude-derived fuel exports.
The IEA lifted its 2026 oil demand growth forecast by 90,000 bpd to 860,000 bpd, and its 2025 forecast by 40,000 bpd to 830,000 bpd.
"Falling oil prices and the lower U.S. dollar, both currently near four-year lows, act as further tailwinds for oil demand next year," the IEA said, adding that demand growth in 2025 has come almost entirely from non-OECD countries, which are more reliant on macroeconomic conditions.
The IEA said that a spate of breakthroughs with U.S. trade deals had helped put economic sentiment back on track after tariff-related tensions hit consumption earlier this year.
The IEA expects global oil supply to rise by 2.4 million bpd next year, having previously predicted supply growth of 2.5 million bpd.
The IEA revised down its 2025 and 2026 output forecasts for producers in the Organization of the Petroleum Exporting Countries and its partners (OPEC+), largely because of sanctions disruptions.
Global oil supply fell by 610,000 bpd in the month of November, the IEA said, on declining output from sanctions-hit Russia and Venezuela.
Russian export revenues hit their lowest in November since the full-scale invasion of Ukraine in 2022, the IEA said.
The IEA meanwhile kept its forecasts for non-OPEC+ output stable for this year and next, on rising production in the Americas, namely the U.S., Canada, Brazil, Guyana and Argentina.
