World Oil Market to See Higher Surplus After OPEC+ Hike, IEA Says

• World oil supply will rise more rapidly this year, and a surplus could expand in 2026 as OPEC+ members increase output and supply from outside the group grows, the International Energy Agency (IEA) said on Thursday. This is in contrast to OPEC's updated outlook.
• The IEA said that supply is set to rise by 2.7Mn barrels per day (bpd) in 2025, up from the 2.5Mn bpd previously forecast and by a further 2.1Mn bpd next year.
• OPEC+ is adding more crude to the market after it decided to unwind its second layer of output cuts more rapidly than earlier scheduled. The extra supply has raised concerns of a surplus and weighed on oil prices this year.
• Supply is rising far faster than demand in the IEA's view, even though it upwardly revised its forecast for growth in world demand this year to 740,000 bpd, up 60,000 bpd from the previous forecast, citing resilient deliveries in advanced economies. "Oil markets are being pulled in different directions by a range of forces, with the potential for supply losses stemming from new sanctions on Russia and Iran coming against a backdrop of higher OPEC+ supply and the prospect of increasingly bloated oil balances," the IEA said in the report.
• IEA demand forecasts are at the lower end of the industry range, as the agency expects a faster transition to renewable energy sources than other forecasters.
• OPEC, on the other hand, maintained its forecast that demand will rise by 1.29Mn bpd this year, almost double the rate expected by the IEA, and said the world economy was doing well into the second half of 2025. The upbeat outlook follows the decision of the wider OPEC+ on Sunday to further raise its oil output quotas from October as its leader, Saudi Arabia, pushes to regain market share.
• Oil prices declined on Thursday, with Brent crude trading just below $67 a barrel. This is still up from a 2025 low of near $58 in April.

(Source: Reuters)