Paris - EcoPulse24

The International Energy Agency’s Oil Market Report reveals that the global oil market is entering 2026 with a significant supply surplus. Global oil production is expected to rise by 2.5 million barrels per day this year, while demand growth is projected at only 930,000 barrels per day.

Continued Price Decline

Benchmark Brent crude oil prices have fallen for six consecutive months, dropping by $0.99 in December to an average of $62.64 per barrel, the lowest level since early 2021. Current prices are about $16 per barrel lower than a year ago.

This price decline reflects the substantial global surplus accumulated over the past 12 months, with observed global oil inventories up by 470 million barrels in 2025, an average of 1.3 million barrels per day.

Saudi Arabia Leads OPEC+ Production Increase

IEA data shows that Saudi Arabia led the increase in OPEC+ supply after easing production restrictions, reaching 9.7 million barrels per day in December 2025, with spare capacity of 2.41 million barrels per day.

Total OPEC+ output reached 43.29 million barrels per day in December, with an overall spare capacity of 4.56 million barrels per day.

Non-OPEC+ Production Growth

Non-OPEC+ countries accounted for about 60% of the total global supply increase of 3 million barrels per day in 2025, led by the US, Canada, Brazil, Guyana, and Argentina.

The IEA expects this trend to continue in 2026, with non-OPEC+ nations contributing around 1.3 million barrels per day to the overall supply increase.

Mixed Geopolitical Developments

The beginning of the year saw geopolitical tensions affecting some exporters. Iran’s shipments dropped by 350,000 barrels per day from their October peak to 1.6 million barrels per day in November and December. Venezuela’s exports fell from 880,000 barrels per day in December to about 300,000 barrels per day in early January.

Conversely, Russian production rose sharply in December by 550,000 barrels per day to 9.56 million barrels per day, the highest in 33 months, despite ongoing attacks on energy infrastructure.

Demand Outlook

The IEA expects global oil demand to grow by an average of 930,000 barrels per day in 2026, compared to 850,000 barrels per day in 2025, driven by normalized economic conditions and lower oil prices relative to last year.

All demand growth is expected to come from outside the OECD, with a recovery in petrochemical feedstock demand offsetting continued slowdown in gasoline demand growth.

Global Inventories

Observed global inventories jumped by 75.3 million barrels in November 2025, averaging 2.5 million barrels per day, with crude accounting for 96% of the increase. OECD industrial inventories rose by 7.3 million barrels to 2,838 million barrels, largely in line with the five-year average.

Preliminary data indicates inventories continued to rise in December, driven by growth in refined products.

The IEA’s monthly Oil Market Report is one of the most trusted sources for data and analysis on the global oil market.