Oil Supply vs Demand 2024: Middle East Impact
- Global oil markets are expected to be well-supplied in 2025, with production outpacing demand, according to the International Energy Agency.
- The increase in oil supply is anticipated from both OPEC+ nations,as they reverse production cuts,and non-OPEC+ countries,which are expected to contribute an additional 1.4 million b/d.
- As February, global oil storage has increased by an average of 1 million b/d, with a meaningful surge of 93 million barrels in May alone.
The global oil market is set for a important shift as the International Energy Agency (IEA) predicts oil supply will exceed demand in 2025. This surplus, driven by increased production from OPEC+ and non-OPEC+ nations, coupled with weaker consumption in China and the U.S., poses a challenge for the industry. Geopolitical risks, especially those stemming from the Middle East, remain a critical factor. China’s demand, expected to peak in 2027, will reshape the future as it embraces electric vehicles. Explore how this evolving landscape transforms the dynamics of supply and demand. For more insights, news Directory 3 has you covered. Discover what’s next.
Global Oil Supply to Outpace Demand in 2025, IEA Predicts
Updated June 17, 2025
Global oil markets are expected to be well-supplied in 2025, with production outpacing demand, according to the International Energy Agency. The IEA anticipates a rise of 1.8 million barrels a day, pushing total production to 104.9 million b/d. this exceeds the projected demand of 103.8 million b/d, potentially increasing oil inventories.
The increase in oil supply is anticipated from both OPEC+ nations,as they reverse production cuts,and non-OPEC+ countries,which are expected to contribute an additional 1.4 million b/d. However, weaker consumption in both China and the U.S. is expected to restrain global demand, with a predicted growth of 720,000 b/d, slightly less than the previously forecast 740,000 b/d.
As February, global oil storage has increased by an average of 1 million b/d, with a meaningful surge of 93 million barrels in May alone. Despite this increase, total inventories remain 90 million barrels lower than the previous year.
The IEA also cautioned about the potential for geopolitical risks to disrupt oil supply security, citing the ongoing conflict between Israel and Iran. While there has been no immediate impact on Iranian oil flows, Iran did partially suspend production at the South pars natural gas field following an Israeli airstrike. The Shahran oil depot and refinery near Tehran were also reportedly targeted, though no damage was reported.
Looking ahead to 2030, the IEA forecasts that oil supply will continue to outstrip demand. Global demand is projected to increase by 2.5 million b/d between 2024 and 2030, reaching a plateau of 105.5 million b/d by the end of the decade. Though, global production capacity is expected to rise even faster, increasing by more than 5 million b/d to 114.7 million b/d.
China is expected to play a significant role in the slowdown of oil demand growth. The IEA now anticipates that Chinese consumption will peak in 2027, driven by increased electric vehicle sales and the expansion of high-speed rail and gas-powered trucking. This forecast aligns with predictions from China’s largest oil companies and marks the frist time the IEA has set a firm date for peak Chinese demand.
What’s next
The IEA’s report suggests that the world is heading towards a period of ample oil supply, even as geopolitical tensions persist.The peak in China’s demand will reshape global energy markets.