IEA: Global oil demand rebounds in third quarter
Global oil demand rebounded to 920,000 b/d in third-quarter 2025, primarily driven by stronger deliveries in China, according to the International Energy Agency's (IEA) October Oil Market Monthly Report (OMR).
The increase was more than double the 430,000 b/d year-on-year (y-o-y) increase in second-quarter 2025, mainly reflecting easing trade tensions and an overall improvement in the macroeconomic situation, IEA said.
In September, China's oil demand experienced a significant increase of 440,000 b/d y-o-y, marking the largest rise in a year and a half. This brought total consumption to 17.6 million b/d, the highest level recorded. Demand growth was widespread across various oil products, with major products each rising by around 100,000 b/d.
As a result of these strong demand figures, the average annual growth forecast for 2025 has been adjusted upward by 40,000 b/d to 110,000 b/d, with projections for 2026 anticipating a further increase to 150,000 b/d.
IEA projects global oil demand to grow by 790,000 b/d y-o-y by 2025, with the main growth coming from the US, China, and Nigeria, which will each increase by about 120,000 b/d. Global oil demand is expected to maintain this growth rate in 2026, increasing by 770,000 b/d y-o-y.
Global oil supply declined by 440,000 b/d month-on-month (m-o-m) in October to 108.2 million b/d, led by a downturn in OPEC+ output of 520,000 b/d. Kazakhstan accounted for nearly half of the group’s decline, largely due to maintenance work at Tengiz field. Kuwait, the UAE, and Libya also posted lower production by a combined 250,000 b/d. By contrast, non-OPEC+ supply rose by 80,000 b/d as North Sea and Canadian production returned from seasonal oil field work.
Since January, global oil supply has still increased significantly, by 6.2 million b/d, with the increase evenly distributed between non-OPEC+ and OPEC+ members.
Global oil supply is projected to grow by an average of 3.1 million b/d in 2025 and 2.5 million b/d in 2026, reaching 108.7 million b/d. Non-OPEC+ production is expected to contribute 1.7 million b/d and 1.2 million b/d to this growth, respectively.
Refining, inventories
Meantime, a series of unplanned shutdowns, planned maintenance, and continued disruptions to downstream operations in Russia led to refining margins in Europe and Asia reaching a 2-year high in early November.
Global refinery runs fell by 2.9 million b/d m-o-m to 81.5 million b/d in October, but is expected to recover by yearend. Runs are forecast to rise by 710,000 b/d in 2025 and 510,000 b/d next year, to 83.6 million b/d and 84.1 million b/d, respectively.
Global observable oil inventories surged by 77.7 million bbl, or 2.6 million b/d, in September, reaching their highest level since July 2021. Oil on water rose sharply by 80 million bbl, while OECD inventories increased slightly by 5 million bbl, and non-OECD inventories decreased by 7 million bbl.
In the first 9 months of this year, observable inventories increased by 313 million bbl, an average increase of 1.15 million b/d. Preliminary data for October showed that global inventories increased further, primarily driven by increases, led by additional gains in oil on water.
North Sea crude oil prices fell by about $3/bbl m-o-m in October to $65/bbl. This marked the fourth consecutive month of decline for this grade of crude, driven by market concerns about weak fundamentals and an impending oversupply.
“Global oil market balances are looking increasingly lopsided, as world oil supply is forging ahead while oil demand growth remains modest by historical standards. At the same time, the risks to the forecast remain plentiful, with the economic repercussions of the recent tariff turmoil and the US federal government shutdown still uncertain, and the impacts of new sanctions on Russia yet to become clear,” IEA said in the report.