IEA Predicts Global Oil Market Oversupply by 2026

Paris: The International Energy Agency (IEA) has projected that the global oil market will experience an oversupply of 4 million barrels per day (bpd) by 2026. This prediction comes amidst a recent increase in crude oil supplies from regions such as the Middle East and the Americas, highlighting the pressing need for market adjustments. According to Oman News Agency, Toril Bosoni, who heads the IEA's Oil Industry and Markets Division, indicated that the global oil market is potentially at a pivotal moment. Signs of significant oversupply are beginning to surface, suggesting a critical turning point for the industry. During the first nine months of the year, the overall oil surplus averaged 1.9 million bpd. Despite the surplus, crude oil prices have remained stable. Inventory builds have been concentrated in areas with less influence on pricing, such as crude oil in China and liquefied natural gas (LNG) in the United States. However, crude oil inventory levels in key pricing hubs have remained low. Over the first eight months of 2025, global oil inventories increased by 225 million barrels, reaching a four-year high of 7.9 billion barrels. A significant portion of this increase occurred in China, where crude inventories are now 30 percent higher than in 2019. China's large stockpiles have been bolstered by a new energy law aimed at enhancing energy security. Due to limited storage capacity in strategic petroleum reserves, Chinese oil companies are mandated to increase their inventories in commercial storage facilities. This strategy effectively aligns private companies with the government's long-term goals for oil storage. In the United States, LNG inventories rose by 67 million barrels of oil equivalent, surpassing their seasonal average. This increase is attributed to trade tensions that have disrupted sales to Chinese petrochemical plants. In contrast, markets elsewhere remain more constrained. For instance, in advanced economies, crude oil inventories decreased by 10.4 million barrels over the past five m onths. Meanwhile, in emerging and developing economies outside China, crude oil inventories increased by just 5.5 million barrels over the same period.