The International Energy Agency (IEA) has revised down its oil supply forecasts for this year and next, partly due to a drop in Russian exports as a result of sanctions, but supply remains well above demand, pointing to a continued imbalance.
In its monthly oil market report, the IEA now estimates global supply at 106.2 million barrels per day in 2025, up 3 million bpd from 2024, which is 100,000 bpd less than it forecast in November.
The increase for 2026 is now seen at 2.4 million bpd, taking supply to 108.6 million bpd, a marginal downward revision of 20,000 bpd from last month’s outlook.
Behind these changes is what happened in November, when 610,000 bpd less oil reached the market than in October, mainly due to the impact of international sanctions on Venezuela and, in particular, Russia.
In Russia’s case, output fell by 420,000 bpd in a single month to 6.9 million bpd, the lowest level since the invasion of Ukraine began in February 2022. This was compounded by a 150,000 bpd cut in Venezuela, whose output slipped to 860,000 bpd.
Overall, the cartel formed by the Organization of the Petroleum Exporting Countries (OPEC) accounted for three-quarters of the production cut.
At the same time, the IEA expects oil demand to rise this year by 830,000 bpd compared with 2024, reaching 103.9 million bpd, supported by slightly improved macroeconomic prospects after uncertainty in the first half of the year due to tariffs imposed by Donald Trump.
Those improved prospects also extend into next year, prompting the report’s authors to revise demand estimates up by 90,000 bpd from last month.
As a result, the IEA now expects the market to absorb 104.8 million bpd next year, 863,000 bpd more than in 2025.
Global oil inventories stood at a four-year high in October, at 8.03 billion barrels.
Over the first ten months of this year, inventories rose by the equivalent of 1.2 million bpd, and preliminary data for November point to a further increase.
Alongside these clear imbalances between supply and demand—which, as the IEA notes, have led on average to a $20 decline in the price of Brent crude since the start of the year—the refining industry is also under strain.
After a series of major refinery outages were resolved in November, shortages of refined products have eased, but sanctions scheduled to take effect from early 2026 are already having an impact.
Refining margins have climbed to levels not seen since Russia’s invasion of Ukraine in February 2022.
Against this backdrop and given the existing crude surplus, the IEA has raised its refinery throughput projections by 250,000 bpd for next year to 84.4 million bpd, which would be 750,000 bpd higher than in 2024.
That increase will be concentrated in OECD countries, where throughput is expected to reach 36.2 million bpd next year—560,000 bpd more than forecast in November—and will come largely at the expense of refineries in India, Iran and Serbia.
