Global Oil Market Imbalance and Inventory Increase

Global Oil Market Imbalance is Increasing

The International Energy Agency (IEA) emphasized in its November report that the imbalance in the global oil market is increasing and stock levels continue to rise. This important report provides critical data regarding the future of the oil market.

Demand and Supply Forecasts

The IEA updated its forecast for global oil demand in 2025 to an increase of 788,000 barrels per day, while raising this estimate to 770,000 barrels per day for 2026. However, the increase in supply side is far exceeding the increase in demand. For 2025, a daily increase of 3.1 million barrels is projected, and for 2026, 2.5 million barrels.

Causes of Market Imbalance

According to the IEA's assessments, 'Global oil supply is rapidly increasing while demand growth remains modest compared to historical averages.' This situation poses a significant threat to market balance. The Agency expects that in 2025, supply will exceed demand by 2.4 million barrels per day and by 4 million barrels per day in 2026.

Demand Increase and China's Role

In the third quarter of 2025, global oil demand saw an increase of 920,000 barrels per day. The most significant contribution to this increase came from China. However, the slowdown in demand growth in the fourth quarter and the ongoing rise in supply may affect market dynamics.

OPEC+ Production and Changes in Supply

The decline in OPEC+ production in October indicates a decrease in global supply of 440,000 barrels per day on a monthly basis. In contrast, non-OPEC+ production increased by 80,000 barrels per day during the same period. Total supply is projected to be 106.3 million barrels per day in 2025 and 108.7 million barrels per day in 2026.

Balance Between OPEC+ and Non-OPEC+ Producers

The IEA emphasized that the total supply increase is nearly equally divided between OPEC+ and non-OPEC+ producers. It is estimated that non-OPEC+ production will increase by 1.7 million barrels per day while OPEC+ production will rise by 1.4 million barrels per day in 2025. This balance could have significant effects on the future of the global oil market.