The International Energy Agency (IEA) has updated its projections for the oil market in 2026, signaling a stronger demand growth outlook while also adjusting supply growth figures upward. According to the IEA’s latest monthly report, global oil demand is now expected to grow by 930,000 barrels per day (bpd) next year, marking an increase from their previous estimate of 860,000 bpd. This revision suggests a slightly more robust consumption environment than initially forecasted.
On the supply side, the IEA also raised its prediction for global oil production increase in 2026 to 2.5 million bpd, which is modestly higher than the earlier forecast of 2.4 million bpd. This adjustment indicates a marginal expansion in the availability of crude oil and related products on the market.
Despite the upward adjustments in both demand and supply projections, the IEA continues to anticipate that the oil market will experience a considerable surplus next year. The agency estimates that total oil supply will outpace demand by approximately 3.69 million bpd in 2026, which is slightly less than the 3.84 million bpd surplus projected in its prior report.
The IEA highlighted the potential for a pronounced surplus particularly in the first quarter of 2026, driven by refinery maintenance activities that typically reduce processing capacity. Unless there are disruptions to major oil supplies, this surplus could become a prominent factor influencing market dynamics during that period.
Concerning recent production statistics, the IEA reported an increase in Russian crude oil output, rising to 9.56 million bpd in December from 9.0 million bpd in the previous month. This increase in Russian production figures could contribute to overall supply growth next year.
Regarding oil supplies from Venezuela and Iran, the IEA indicated that it is too soon to assess the longer-term consequences of recent developments in these markets. Consequently, the agency has largely maintained its existing forecasts for output from both countries.