The International Energy Agency (IEA) has projected a surplus in the global oil market for 2026, estimating up to four million barrels per day (mbbl/d).
This forecast marks an increase from last month's estimate of 3.3mbbl/d in 2026.
The anticipated surplus would account for nearly 4% of global demand, reported Reuters.
The Organisation of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, have been increasing crude production after deciding to accelerate the easing of output cuts.
This additional supply has contributed to concerns about a potential oversupply, impacting oil prices throughout the year.
The IEA's latest report highlights a faster rise in supply compared to demand.
The agency expects supply to increase by 3mbbl/d this year from the previous estimate of 2.7mbbl/d, and a 2.4mbbl/d increase in 2026.
The IEA has reduced its forecast for global demand growth this year to 710,000 barrels per day (bpd), a decrease of 30,000bpd from earlier projections, due to economic challenges.
In its monthly report, the IEA said: “Oil use will remain subdued over the remainder of 2025 and in 2026, resulting in annual gains forecast at around 700,000bpd in both years.
“This is well below historical trend, as a harsher macro climate and transport electrification make for a sharp deceleration in oil consumption growth.”
In contrast, OPEC maintains its prediction of a 1.3mbbl/d increase in demand for this year, nearly double the IEA's estimate.
OPEC also forecasts that global oil supply will align more closely with demand next year, anticipating slower growth from non-OPEC+ producers and stronger demand.
According to the IEA report, global oil supply in September was 5.6mbbl/d higher than a year earlier, with OPEC+ contributing 3.1mbbl/d to this increase.
In addition, the amount of oil transported by sea in September saw a significant rise of 102mbbl, attributed to increased production in the Middle East.
Looking forward, supply growth is expected from non-OPEC+ countries including the US, Canada, Brazil and Guyana.
Last month, the IEA reported a significant decline in rates from oil and gas fields worldwide, driven by increased reliance on shale and deep offshore resources.
