World oil supply will rise more rapidly than expected this year and next as OPEC+ members further increase output and supply from outside the group grows, the International Energy Agency said on Wednesday.
Supply will rise by 2.5 million barrels per day (bpd) in 2025, up from 2.1 million bpd previously forecast, the IEA, which advises industrialised countries, said in a monthly report, and by a further 1.9 million bpd next year.
Reuters reports that OPEC+ is adding more crude to the market after the Organization of the Petroleum Exporting Countries, Russia and other allies decided to unwind its most recent layer of output cuts more rapidly than earlier scheduled. The extra supply, along with concern about the economic impact of President Donald Trump’s tariffs, has weighed on oil this year.
Supply is rising far faster than demand in the IEA’s view. It expects world oil demand to rise by 680,000 bpd this year and 700,000 bpd next year, both down 20,000 bpd from the previous forecast.
“The latest data show lacklustre demand across the major economies and, with consumer confidence still depressed, a sharp rebound appears remote,” the agency said in the report that linked its higher output forecast to increased OPEC+ production targets. “Oil market balances look ever more bloated.”
IEA demand forecasts are at the lower end of the industry range, as the agency expects a faster transition to renewable energy sources than some other forecasters. OPEC on Tuesday maintained its forecast for demand to rise by 1.29 million bpd this year – almost double the IEA figure.
Oil prices extended losses after the IEA published its report at 0800 GMT, with Brent crude trading lower than $66 a barrel.
The report implies that supply may exceed demand by almost 3 million bpd next year, driven by growth from outside the wider OPEC+ group and a limited expansion in demand.
Despite higher OPEC+ production, non-OPEC producers will continue to lead supply growth this year and next owing to rising output in the U.S., Canada, Brazil and Guyana, according to the IEA.
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