The International Energy Agency (IEA) has forecast a significant global oil surplus in 2026, warning that supply could exceed demand by as much as 4 million barrels per day (bpd) nearly 4% of total world consumption.
In its latest monthly report released on Tuesday, the Paris-based agency said the projected surplus is larger than previously estimated, up from 3.3 million bpd predicted last month, as OPEC+ producers and non-OPEC rivals continue to raise output despite sluggish global demand.
The IEA attributed the looming glut to OPEC+’s decision to unwind production cuts earlier than planned, adding millions of extra barrels to the market and driving oil prices downward. On Tuesday, Brent crude traded just below $62 per barrel, slipping from earlier highs.
According to the agency, global oil supply is expected to rise by 3 million bpd in 2025 and an additional 2.4 million bpd in 2026, far outpacing demand growth, which has been revised down to around 700,000 bpd annually for both years.
The IEA cited a weakened global economy and the rapid electrification of transport as key factors behind the slowdown in oil consumption, marking a sharp deviation from historical growth trends.
In contrast, OPEC remains more optimistic, maintaining its forecast of a 1.3 million bpd demand increase this year, nearly double the IEA’s projection, arguing that the world economy remains resilient.
The IEA also noted that global oil supply in September 2025 rose by 5.6 million bpd year-on-year, with OPEC+ accounting for 3.1 million bpd of the increase. It further reported a 102 million-barrel jump in seaborne oil shipments, the largest since the COVID-19 pandemic, largely driven by rising Middle East output.
Additional supply growth is expected from non-OPEC countries such as the United States, Canada, Brazil, and Guyana, further intensifying the expected oversupply.
The agency’s outlook suggests that the oil market could face mounting price pressure in 2026, as the pace of renewable energy adoption and economic challenges continue to restrain global demand growth.
If realized, the projected glut could reshape global energy dynamics, forcing producers to reconsider output strategies and long-term investment plans in an increasingly carbon-conscious world.