Global oil demand is projected to rise more slowly than anticipated in 2026, according to the International Energy Agency (IEA). Despite supply disruptions, the global market is expected to face a significant surplus. Oil prices have surged by 14% since the year's start due to heightened tensions between the U.S. and Iran and supply outages. The IEA's monthly report predicts a 3.73 million barrel per day surplus, which is 4% of global demand and larger than other forecasts. This surplus is attributed to the rapid increase in oil supply from OPEC+ and other producers, who began boosting output in April 2025 after years of cuts. The IEA's demand growth forecast for 2026 is 850,000 barrels per day, a decrease from the previous month's estimate. Economic uncertainties and higher oil prices are cited as factors impacting consumption. The IEA also revised its supply growth projection for 2026 to 2.4 million barrels per day, still outpacing demand growth.
