removes reference to implied surplus
The IEA has trimmed its forecast for global oil demand growth in 2025 by 20,000 b/d to 700,000 b/d, citing weaker-than-expected deliveries in the second quarter across several tariff-affected economies. The agency also revised down its 2026 growth outlook by the same amount, to 720,000 b/d.
The updated figure for 2025 marks the slowest annual increase in demand since 2009, excluding Covid-affected 2020. The IEA said the second-quarter slowdown followed an unusually strong first quarter in the OECD, which had been boosted by colder-than-average winter weather.
"Although it may be premature to attribute this slower growth to the detrimental impact of tariffs manifesting themselves in the real economy, the largest quarterly contractions occurred in countries that found themselves in the crosshairs of the tariff turmoil," the agency said, pointing to declines in China, Japan, Korea, the US and Mexico.
The IEA now expects global oil demand to average 103.68mn b/d in 2025 and 104.4mn b/d in 2026. Petrochemical feedstocks — namely LPG/ethane and naphtha — will account for two-thirds of this year's growth, it said. Transport fuel demand remains under pressure in key markets such as China, where electrification and efficiency gains are weighing on gasoline use despite strong mobility indicators.
On the supply side, the IEA raised its forecast for global oil supply growth in 2025 by 240,000 b/d to 2.1mn b/d, putting full-year supply at 105.1mn b/d. The upward revision reflects a faster-than-expected unwinding of Opec+ voluntary cuts, with Saudi Arabia accounting for most of the increase. Non-Opec+ producers still dominate overall growth, contributing 1.4mn b/d in 2025.
