IEA expects global oil demand to rise more slowly

World oil demand will rise more slowly than expected this year, the International Energy Agency said on Thursday, while projecting that the global market continues to face a sizeable surplus despite outages that cut supply in January.

The IEA, which advises industrialised countries, in its monthly oil report projected global oil supply would exceed demand by 3.73 million barrels per day in 2026, similar to last month’s projection. A surplus of that size would be about 4% of world demand and is larger than other predictions.

Oil prices have risen about 14% since the start of the year on tensions between the US and Iran and as supply outages in a number of producers tightened supply. Global benchmark Brent was trading near $70 a barrel on Thursday.

“Escalating geopolitical tensions, snow storms and extreme temperatures in North America, and Kazakh supply disruptions sparked the reversal to a bullish market,” the IEA said in the report.

World oil demand will rise by 850,000 bpd this year, the IEA said, down 80,000 bpd from last month’s forecast and much lower than the prediction on Wednesday from producer group Opec.

Referring to the lower demand growth forecast, the IEA said “economic uncertainties and higher oil prices” are weighing on consumption.

Supply has risen faster than demand mostly because Opec, or the Organization of the Petroleum Exporting Countries plus Russia and other allies, began boosting output in April 2025 after years of cuts. Other producers, such as the US, Guyana, and Brazil, have also increased production.

The IEA trimmed its projection for the growth in world oil supply this year to 2.4 million bpd, from 2.5 million bpd last month, although this is much faster than the rate of demand growth.

Further reading:

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• World demand for Opec+ crude set for second-quarter fall