Oversupply of oil could create glut of 4m barrels a day, says energy watchdog

"The world is producing more oil than it needs and by next year there could be a glut of 4m excess barrels a day entering the market, according to the global energy watchdog. The International Energy Agency said the surplus in 2026 was likely to be larger than previously forecast, despite a decision from the biggest oil producers to pause their plan to increase crude exports."

"The warning of a looming oversupply has emerged in the same week that the agency published its energy outlook report, including a controversial scenario in which global oil demand would continue to grow until 2050. The model, which takes a conservative view of global climate action, was dropped in 2020 after the IEA was repeatedly criticised for underestimating the growth of renewable energy in its annual report."

The International Energy Agency projects a possible surplus of about 4 million barrels per day in 2026 as global oil supply outpaces modest demand growth. Slower-than-usual expansion in world oil consumption contrasts with accelerating supply, producing a growing market glut. The IEA reintroduced a long-term scenario showing oil demand rising until 2050 based on a conservative view of climate action. Critics argue the scenario underestimates electric vehicle adoption, especially in developing Asian countries, which is already reducing oil demand. Other IEA scenarios foresee oil consumption peaking by 2030 due to strong uptake of EVs and renewables, and renewable energy is expected to at least double over five years.

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