LONDON- Global oil supply could exceed demand by around 600,000 barrels per day this year, the International Energy Agency said in a monthly oil market report on Thursday, after a downward revision to its 2025 demand growth forecast.
That surplus could grow by a further 400,000 bpd if OPEC+ extends its unwinding of output cuts, and fails to rein in overproduction against quotas, the Paris-based agency said.
The IEA revised down its 2025 oil demand growth forecast by 70,000 bpd to around 1 million bpd, with growth driven largely by Asia, specifically China’s petrochemical industry.
It added that demand for the last quarter of 2024 and the first quarter of this year had come in below expectations amid “an unusually uncertain macroeconomic climate.”
“New US tariffs, combined with escalating retaliatory measures, tilted macro risks to the downside. Recent oil demand data have underwhelmed, and growth estimates for 4Q24 and 1Q25 have been marginally downgraded.”
Fatih Birol, the director of the Paris-based International Energy Agency, said on Monday there is a need for investment in oil and gas fields to support global energy security.
The comment puts the energy watchdog for industrialized nations more in line with President Donald Trump’s pro-drilling agenda, after it came under pressure from fossil fuel advocates years ago for proposing an end to new oil and gas projects.
“I want to make it clear … there would be a need for investment, especially to address the decline in the existing fields,” he said at the CERAWeek energy conference in Houston. “There is a need for oil and gas upstream investments, full stop,” he said.
Birol has been under pressure from Trump’s administration and from the president’s fellow Republicans in Congress for the IEA’s shift in recent years toward a focus on clean energy policy.
In 2021, the IEA said companies should not invest, opens new tab in new coal, oil and gas projects if the international community wants to reach net zero emissions by mid-century to fight climate change. Countering global warming was a key priority for the administration of former President Joe Biden.
The IEA has been the energy watchdog to industrialized governments for more than half a century, guiding policy on energy security, supply and investment. The IEA says it has to focus on whatever its members see as important for future energy security. The U.S. provides around a quarter of the group’s funding.
Birol underscored at the conference that underinvestment in existing oil and gas fields is a problem as fossil fuels are important to meet global energy demand.
He said that of the total $400 billion in investments in global oil and gas, about $360 billion goes into offsetting the decline in existing oil and gas fields.
“There is no discussion on the decline in the fields, existing fields,” Birol said.
The IEA’s former oil industry and market chief in January criticized the agency›s focus on the global energy transition and said the agency should concentrate on oil and gas supplies.
