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The Worldwide Vitality Company has predicted that international oil provides will considerably outstrip demand this 12 months even because the escalating battle within the Center East raises fears of disruptions.
International oil manufacturing is anticipated to rise by 1.8mn barrels a day in 2025 to 104.9mn b/d, outstripping forecast demand of 103.8mn b/d and resulting in an increase in oil inventories over the course of the 12 months, the intergovernmental vitality advisory physique mentioned in its annual report.
“Within the absence of a significant disruption, oil markets in 2025 look effectively provided,” the IEA mentioned.
The rise in provide is anticipated to come back from each the Opec+ cartel, which is within the technique of reversing a collection of manufacturing cuts, and from non-Opec+ producers, which is able to add a median of 1.4mn b/d over the 12 months, it mentioned.
On the identical time, weak consumption in China and the US will restrain international demand, which it predicted will develop by 720,000 b/d this 12 months, lower than a beforehand forecast improve of 740,000 b/d.
With provide exceeding demand, the quantity of oil in storage on the earth has risen by a median of 1mn b/d since February, and by “an enormous” 93mn barrels in Could alone, the IEA added. Nevertheless, whole inventories nonetheless remained 90mn barrels decrease than a 12 months in the past.
The IEA cautioned that battle between Israel and Iran posed important “geopolitical dangers to grease provide safety” however added that there had been “no affect on Iranian oil flows on the time of writing”.
Iran partially suspended manufacturing on the world’s greatest pure gasfield, South Pars, after an Israeli air strike on the weekend, however it was nonetheless unclear if manufacturing had been affected, it mentioned.
The Shahran oil depot and refinery close to Tehran had additionally been focused, however no injury was reported, it added.
In a separate report on the outlook to 2030, the IEA forecast that oil provide would proceed to outstrip demand over the following 5 years. International oil demand is anticipated to extend by 2.5mn b/d between 2024 and 2030, reaching “a plateau” of 105.5mn by the top of the last decade.
Provide will rise a lot sooner, it mentioned, with international manufacturing capability growing by greater than 5mn b/d to 114.7mn b/d.
The slowdown in oil demand development might be pushed largely by China, the place the IEA now expects consumption to peak in 2027, following a surge in electrical car gross sales and the continued rollout of high-speed rail and gas-powered trucking, it mentioned.
The forecast aligns with predictions made by China’s largest oil corporations however is the primary time the IEA has put a agency date on peak Chinese language demand.