The global oil market is expected to experience significant oversupply in 2026, with the International Energy Agency (IEA) estimating it will reach 4 million barrels per day. This forecast was published in the agency’s new report, which questions previous estimates and highlights the growing gap between supply and demand on a global scale.
This is reported by Finway
Reasons for the Increase in Oil Surplus
The primary factor contributing to the surplus is the elevated level of production provided by OPEC+ countries along with other leading producers. This occurs against a backdrop of persistently low demand that has lasted for an extended period. The IEA has revised its previous forecast, which anticipated a surplus of around 3.3 million barrels per day in 2026, and now expects a significantly larger excess of supply over demand. The level of 4 million barrels represents nearly 4% of total global oil demand, which is considerably higher than the forecasts of most other analysts in this field.
Consumption Trends and Price Dynamics
“Oil consumption will remain moderate for the remainder of 2025 and into 2026, leading to an anticipated annual increase of around 700,000 barrels per day over both years,” the IEA’s monthly report states.
Last Friday, the oil market experienced a significant price drop due to escalating trade tensions between the U.S. and China. On October 14, Brent crude oil futures, which had shown some recovery earlier in the week, fell again to just over $62 per barrel. Meanwhile, the price of Russian Urals oil remains slightly above $58 per barrel, significantly reducing the budget revenues of the Russian Federation.