IEA Slashes Oil Demand Growth Forecast For 2026

By Tsvetana Paraskova of OilPrice,

Global oil demand is expected to rise by 850,000 barrels per day this year, the International Energy Agency (IEA) said on Thursday as it cut its growth estimate from 930,000 bpd expected last month.  

All the 850,000 bpd growth this year is poised to come from developing economies, with China leading the additional demand, the agency said in its closely-watched Oil Market Report for February.   

Petrochemical feedstock products are set to account for more than half of this year’s gains, compared with only a third in 2025 when transport fuels dominated growth, the IEA said. 

The agency’s forecast is well below OPEC’s estimate of 1.4 million bpd oil demand growth this year from 2025, which the cartel reiterated in its own monthly report earlier this week. OPEC sees robust growth of 1.3 million bpd for 2027, too. 

The IEA today confirmed its estimate that the oil market will be in a surplus in 2026, with supply set to rise by 2.4 million bpd in 2026, to 108.6 million bpd. Growth will be roughly evenly split between non-OPEC+ and OPEC+ producers, the agency said. 

Last month, the IEA expected oil supply to rise by 2.5 million bpd this year, but it slightly revised down the estimate this month due to the winter storm in the United States and disruptions in other countries. 

In January, global oil supply plunged by 1.2 million bpd to 106.6 million bpd, as severe winter weather disrupted North American operations, while outages and export constraints curtailed Kazakh, Russian, and Venezuelan flows.  

But world oil supply is set to rebound in the coming months as output recovers from the plunge in January, when extreme winter weather forced the shut-in of more than 1 million bpd of output in North America, the IEA said. In addition, prolonged disruptions at Kazakhstan’s key export terminal since November were compounded by a power outage at the country’s largest oilfield, Tengiz, last month, temporarily tightening Atlantic Basin light crude markets, the agency noted.