MercoPress. South Atlantic News Agency

Oil heading below US$ 50 per barrel anticipates Energy Agency

IEA in its latest report anticipates that because of soaring “supply and subdued demand”, oil oversupply will be larger than expected, both in 2025 and 2026.

When oil prices in the international market are sliding faster than expected, already in the range of US$ 50 the barrel, the International Energy Agency, IEA in its latest report anticipated that because of soaring “supply and subdued demand”, oil oversupply will be larger than expected, both in 2025 and 2026. IEA warns that while demand growth is down, supply growth will lead to a record supply overhang, since oil stocks are already soaring, mainly that stockpiled in tankers in water.

The IEA revised down its estimate of global oil demand growth to 700,000 barrels per day (bpd) for both 2025 and 2026, down from 740,000 bpd expected for 2025.

The agency’s latest estimate is nearly half the demand growth expected by OPEC, which this week kept unchanged its 2025 and 2026 oil demand growth forecasts at 1.3 million bpd and 1.2 million bpd, respectively.

Despite an uptick in demand in the third quarter compared to the same period last year, “oil use will remain subdued over the remainder of 2025 and in 2026, resulting in annual gains forecast at around 700 kb/d in both years,” the IEA said in its October report.

“This is well below historical trend, as a harsher macro climate and transport electrification make for a sharp deceleration in oil consumption growth,” the agency noted.

At the same time, the IEA sees global oil supply on track to rise by 3 million bpd to 106.1 million bpd this year, and by another 2.4 million bpd next year.

That’s higher than the September forecast of 2.7 million bpd supply growth for 2025 and 2.1 million bpd growth next year.

Soaring Middle East supply, combined with robust flows from the Americas, swelled oil on water in September by a massive 102 million barrels, equivalent to 3.4 million bpd, which is the largest increase since the pandemic, the agency said.