The IEA warns that the global oil market may face greater pressure than forecast, even though official figures record a large supply surplus.
The International Energy Agency observes that refining activity is increasing due to summer demand and electricity needs, leading to oil reserves not increasing proportionately, reflecting market tightening beyond the supply-demand balance numbers.
MAIN CONTENT
The IEA raises its oil supply forecast for 2025 to 2.1 million barrels per day but reduces demand growth to 700,000 barrels per day.
The oil market remains tense due to strong refining activity and high electricity demand in summer.
Lower demand forecasts than OPEC indicate a trend towards rapid clean energy transition and caution regarding global purchasing power.
What does the IEA predict about global oil supply and demand in 2025?
IEA Director Fatih Birol stated that the agency has just revised its oil supply forecast upwards by 300,000 barrels per day to 2.1 million barrels per day, while lowering growth expectations for demand to 700,000 barrels per day this year.
Although on paper it shows a significant supply surplus, the IEA emphasizes that high input factors in refining and increased electricity demand in the summer are reducing actual oil reserves, putting pressure on the market. The latest decision by OPEC+ to accelerate recently cut supply is not enough to ease market tensions.
"OPEC+'s decision to promote an early lifting of production cuts does not create a clear effect, as the underlying market situation remains very tight."
Fatih Birol, IEA Director, July 2024
Is the oil market really oversupplied as the figures suggest?
According to IEA's monthly report, the spread between spot contracts and futures contracts (backwardation) indicates that market signals are much tighter than the aggregate balance figures. Refiners continue to maintain solid profits despite a slight increase in inventory.
Not only the IEA, but also OPEC oil ministers and leaders of Western energy companies affirmed that the surplus oil in the market has not translated into significant inventories, while demand remains high despite tariff risks and US-China trade tensions.
The effects of summer and refining activity on oil demand
IEA data shows that oil consumption demand rises sharply in the summer, especially in the Northern Hemisphere with increased travel and electricity demand as air conditioning units operate. The amount of crude oil through refineries is expected to increase by nearly 3.7 million barrels per day from May to August, with oil used for summer electricity generation doubling to 900,000 barrels per day.
Nevertheless, the increase of 700,000 barrels per day in 2025 is still the lowest growth rate since the 2020 recession, influenced by trade issues and economic fluctuations in major countries such as the United States, Japan, China, and South Korea.
Comparing oil demand forecasts between IEA and OPEC
The IEA maintains a cautious view on future demand forecasts, stating that a rapid shift to clean energy will limit crude oil growth. In contrast, OPEC predicts demand will increase by about 1.3 million barrels per day in 2025 – nearly double the IEA's figure.
Criteria IEA (2025) OPEC (2025) Oil supply growth 2.1 million barrels/day Not specifically announced Oil demand growth 700,000 barrels/day 1.3 million barrels/day Energy trend perspective Accelerate transition to clean energy Focus on oil and natural gas
IEA's outlook on the oil market in 2026
The IEA forecasts that global oil demand will increase by about 720,000 barrels per day in 2026, 20,000 barrels per day lower than previous forecasts, while supply will increase by nearly 1.3 million barrels per day. This reflects increased caution regarding market volatility and the impact of the global energy transition.
"We are witnessing an oil market with many unknowns under pressure from various economic factors, while the energy transition is occurring faster than previously predicted."
Fatih Birol, IEA Director, July 2024
Frequently asked questions
How much will global crude oil increase in 2025? The IEA estimates oil supply will rise by 2.1 million barrels per day, but demand will only increase by 700,000 barrels per day, much lower than forecasts from other organizations. Why is the oil market still tense despite the supply surplus? The refining sector and increased summer electricity demand are causing oil reserves not to rise, creating market pressure beyond traditional surplus figures. How do the IEA and OPEC differ in their demand forecasts? OPEC predicts an increase in oil demand of about 1.3 million barrels per day, nearly double the cautious forecast of 700,000 barrels per day from the IEA. How does summer refining activity impact the market? Refining activity increases by 3.7 million barrels per day in summer due to high travel and electricity demand, increasing actual oil consumption. What is the IEA's outlook for the oil market in 2026? The IEA predicts that supply will expand by 1.3 million barrels per day, with demand increasing by 720,000 barrels per day, reflecting a slow shift in current oil demand.
Source: https://tintucbitcoin.com/iea-canh-bao-ap-luc-lon-dau-toan-cau/
Thank you for reading this article!
Please Like, Comment, and Follow TinTucBitcoin to stay updated with the latest news about the cryptocurrency market and not miss any important information!
