The International Energy Agency (IEA) said the projected increase in oil inventories is “unsustainable” after global production hit a record in August and OPEC decided to raise output again in October.
In its monthly oil market report, the IEA estimated that global inventories will rise by an average of 2.5 million barrels per day (bpd) in the second half of the year as supply far outpaces demand.
In July alone, inventories increased by 26.5 million barrels, marking the sixth consecutive month of builds and bringing the total accumulation since the start of the year to 187 million barrels.
The situation risks worsening following Sunday’s decision by OPEC and its allies (OPEC+) to increase crude output, unless geopolitical tensions, trade policies or new sanctions against Russia or Iran shift current market imbalances, the report said.
OPEC+ agreed to raise production in October by 137,000 bpd, a smaller increase than in recent months due to weakening global demand.
The IEA noted that oil demand hit a new record in August at 106.9 million bpd and now projects full-year demand to average 105.8 million bpd, up 2.7 million bpd from 2024, with 1.3 million bpd supplied by OPEC+.
For 2026, the agency expects demand to climb by another 2.1 million bpd to 107.9 million, with OPEC+ contributing 1 million bpd of additional supply.
Still, the IEA stressed that in October OPEC’s actual supply will fall short of its theoretical target, as Kuwait and Kazakhstan remain 1.1 million bpd below quota while others, particularly Russia, face capacity constraints.
In September, OPEC+ output will be 1.5 million bpd higher than in the first quarter, well below the announced target of 2.5 million bpd, the agency said.
