The International Energy Agency (IEA) has downgraded its global oil demand growth forecast for 2025, predicting a supply surplus due to the expected increase in production from the OPEC+ alliance and the momentum of U.S. supplies.
In its monthly report released on Thursday, the agency projected global oil demand growth this year to rise by just over 1 million barrels per day, compared to its previous estimate of 1.1 million barrels per day.
The report stated that Asian countries, led by China, would account for nearly 60% of the expected demand growth, driven by the consumption momentum in the petrochemical sector in Beijing.
The agency noted that average oil prices fell by $7 per barrel in February and early this month due to weakened sentiment from the deterioration of the macroeconomic situation amid rising global trade tensions, and OPEC+ plans to increase production in April.
It also pointed out that U.S. crude production is at record levels and is expected to be a major factor driving global production growth in 2025.
The agency estimated that a global supply surplus of about 600,000 barrels per day would occur this year, and suggested that the surplus could increase by an additional 400,000 barrels if OPEC+ continues to abandon voluntary production cuts after April without limiting supplies from member countries that exceed their targeted production quotas.
