The International Energy Agency’s (IEA) Oil Market Report (OMR) is widely recognized as one of the most reliable and up-to-date sources of information, forecasts, and in-depth analysis concerning the global oil market, reports the IEA.
Key Highlights
Global Oil Demand:
- Oil demand growth is projected to decelerate from 990 kilobarrels per day (kb/d) in the first quarter of 2025 to 650 kb/d for the rest of the year.
- The average demand growth is forecast to be 740 kb/d in 2025 and 760 kb/d in 2026.
- This slowdown is attributed to economic headwinds and a surge in electric vehicle (EV) sales.
- While emerging economies remain the primary drivers of growth (adding 860 kb/d in 2025 and 1 million barrels per day (mb/d) in 2026), OECD countries are expected to see accelerating declines of -120 kb/d and -240 kb/d in 2025 and 2026, respectively.
World Oil Supply:
- Global oil supply is anticipated to increase by 1.6 mb/d to an average of 104.6 mb/d in 2025, with an additional rise of 970 kb/d in 2026.
- Non-OPEC+ producers are set to contribute significantly, adding 1.3 mb/d this year and 820 kb/d next year, despite a reduction in US Light Tight Oil (LTO) supply forecasts.
- OPEC+ producers are projected to add 310 kb/d of extra supply in 2025 and 150 kb/d in 2026, based on their latest plans.
Refinery Throughput:
- Refinery throughput forecasts for 2025 and 2026 remain largely stable at 83.2 mb/d and 83.6 mb/d, respectively.
- Annual gains of approximately 400 kb/d in both years are exclusively driven by non-OECD regions.
- Refining margins reached 12-month highs across most regions in late April, as changes in crude pricing enhanced profitability.
Global Oil Stocks:
- Global oil stocks increased by 25.1 mb in March 2025, primarily due to a 57.8 mb rise in crude inventories.
- Despite this build, total stocks stood at 7,671 mb, remaining significantly below the five-year average (-221 mb).
- OECD inventories saw a 3.1 mb increase, while non-OECD stocks grew by 21.3 mb, and oil on water slightly rose by 0.7 mb.
- Preliminary data suggest a continued build in global oil inventories in April.
Crude Oil Prices:
- Benchmark crude oil prices experienced a decline of approximately $10 per barrel over April and into May.
- This downward trend was influenced by escalating US tariffs and larger-than-expected output increases from OPEC+.
- Bearish sentiment eased slightly after the US reached trade deals with the UK on May 8th and a 90-day accord with China on May 12th.
- Russian crude prices averaged $55.64/bbl in April, with all major export grades remaining below the $60/bbl price cap.
- As of the time of writing, North Sea dated crude was trading at around $66/bbl.
Renewed Decline
Global oil prices experienced a renewed decline in late April and early May, driven by mounting trade tensions affecting financial and commodity markets, and OPEC+’s decision to further unwind production cuts. While bearish sentiment temporarily eased following the United States reaching a trade deal with the United Kingdom on May 8th and a 90-day accord with China on May 12th, increased trade uncertainty is still expected to exert pressure on the global economy and, consequently, on oil demand. Brent crude oil futures notably slumped by $14 per barrel in April, reaching a four-year low just above $60 per barrel by early May, before partially recovering to approximately $66 per barrel at the time of writing.
Signs of a slowdown in global oil demand growth are starting to emerge and are being closely monitored. Following a relatively robust first quarter of 2025, recent non-OECD delivery data, particularly from China and India, has been weaker than anticipated. As a result, oil demand growth for the remainder of 2025 is now projected at a more subdued rate of 650 kilobarrels per day (kb/d), leading to an average annual increase of 740 kb/d for the year. This is expected to be followed by a rise of 760 kb/d in 2026. Despite this recent softness, emerging economies are still seen as the primary engine of growth, contributing 860 kb/d this year and 1 million barrels per day (mb/d) next year. This contrasts with an accelerating decline in OECD countries, forecast at -120 kb/d and -240 kb/d in 2025 and 2026, respectively
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Source: IEA
