Global oil demand growth is projected to decelerate from 990,000 barrels per day (bpd) in the first quarter of 2025 (Q1 2025) to 650,000bpd for the remainder of the year, according to a report by the International Energy Agency (IEA).
The average annual increase of 740,000bpd is expected in 2025, rising further to 760,000bpd in 2026.
This comes as economic headwinds and a surge in electric vehicle (EV) sales temper oil use, despite the accelerating declines in the Organization for Economic Cooperation and Development (OECD) countries.
World oil supply is anticipated to rise by 1.6 million barrels per day (mbbl/d) to an average of 104.6mbbl/d in 2025, with a further increase of 970,000bpd in 2026.
Non-OPEC+ producers are expected to contribute 1.3mbbl/d this year and 820,000bpd the following year, even as US light tight oil (LTO) supply sees reductions.
OPEC+ is poised to add 310,000bpd of extra supply in 2025 and 150,000bpd in 2026, according to the latest plans, the report said.
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By GlobalDataRefinery throughput forecasts for 2025 and 2026 remain largely unchanged at 83.2mbbl/d and 83.6mbbl/d, respectively.
According to the report, global oil stocks experienced a rise of 25.1mbbl in March, primarily due to a 57.8mbbl increase in crude.
However, total inventories remained below the five-year average by 221mbbl.
Benchmark crude oil prices witnessed a decline of around $10 per barrel over April and into May, influenced by escalating US tariffs and larger-than-expected OPEC+ output hikes.
However, bearish sentiment was tempered following trade agreements between the US and the UK, and a 90-day accord with China.
Delivery data from non-OECD countries, particularly China and India, has been weaker than anticipated, leading to a revised growth forecast of 650,000bpd for the remainder of 2025.
OPEC+ announced a second consecutive monthly increase of 411,000bpd for June, advancing production to levels previously scheduled for October 2025.
With new supply targets through June, OPEC+ is set to pump an additional 310,000bpd this year and 150,000bpd in 2026.
With global supply set to significantly outpace demand growth, oil inventories are forecast to rise by an average of 720,000bpd this year and 930,000bpd next year, compared with a decline of 140,000bpd in 2024.
