OPEC and IEA Forecasts Signal Strong Oil Demand Growth Ahead

The Organization of the Petroleum Exporting Countries (OPEC) has maintained its forecast for global oil demand growth, projecting an increase of approximately 1.4 million barrels per day (bpd) in 2025 and 1.3 million bpd in 2026. In its latest Monthly Oil Market Report, OPEC indicated that demand for crude oil from OPEC+ producers is expected to reach 43.0 million bpd in 2026, reflecting a slight increase from the previous year. OPEC's outlook contrasts with some investment banks and analysts who have expressed more cautious views regarding future demand growth.

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The International Energy Agency (IEA) has also revised its oil demand forecasts upward, anticipating an increase of 830,000 bpd in 2025 and 860,000 bpd in 2026. This adjustment is attributed to an improving macroeconomic environment and a rebound in demand, particularly in emerging economies. The IEA noted that the demand for petrochemical feedstocks is expected to drive much of the growth in 2026, with their share of demand expansion projected to rise significantly.

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Both OPEC and the IEA have reported a decline in global oil supply, with the IEA noting a drop of 610,000 bpd in November 2023, primarily due to sanctions affecting Russia and Venezuela. OPEC's production figures showed a slight increase to 43.06 million bpd in November, as several OPEC+ members continued to raise output. Despite the anticipated growth in demand, the IEA has indicated that the global oil surplus has narrowed, reflecting a balance between supply and demand dynamics.

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While OPEC remains optimistic about future demand growth, some analysts have raised concerns about the sustainability of this outlook, particularly in light of potential economic headwinds and geopolitical tensions. The IEA has highlighted that unresolved tariff negotiations and sanctions could continue to impact oil markets, creating uncertainty around demand projections.

IEA cuts oil surplus forecast as demand growth outlook raised

OPEC stated, "The world economy remains on a solid footing," reinforcing its positive outlook for oil demand. Conversely, the IEA commented on the "disconnect between the current global oil surplus and inventories near decade lows," suggesting that market conditions may not align with traditional supply-demand dynamics.

IEA cuts oil surplus forecast as demand growth outlook raised

• “anxiety about tariffs having largely subsided.” — IEA

IEA cuts oil surplus forecast as demand growth outlook raised

• “Much has been made about the apparent disconnect between the current global oil surplus on the one hand and inventories near decade lows at key pricing hubs on the other.” — IEA

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As both organizations continue to monitor market conditions, upcoming reports will likely provide further insights into the evolving landscape of global oil demand and supply, particularly as geopolitical factors and economic policies unfold in 2026.

IEA cuts oil surplus forecast as demand growth outlook raised