IEA upgrades forecast for 2026 oil demand growth

Global oil demand growth is projected to average 930,000 b/d in 2026, up from 850,000 b/d in 2025, the International Energy Agency (IEA) said in its January 2026 Oil Market Montly Report, reflecting a normalization of economic conditions after last year's tariff disruptions and oil prices trending lower than a year ago. 

This contrasts with the agency’s earlier projections of 830,000 b/d for 2025 and 860,000 b/d for 2026. The recovery in petrochemical feedstock demand will be partially offset by a continued slowdown in gasoline demand growth. All of the growth in 2026 will again come from non-OECD countries, IEA said in the report. 

Global oil supply fell by 350,000 b/d month-on-month in December to 107.4 million b/d, 1.6 million b/d below the record high reached in September. Production declines in Kazakhstan and some Middle Eastern OPEC producers were partially offset by a strong rebound in Russian output. Global oil supply is now projected to grow by 2.5 million b/d this year to 108.7 million b/d, following a 3 million b/d increase in 2025. Non-OPEC+ countries contributed 1.8 million b/d of the growth in 2025 and 1.3 million b/d of the growth in 2026.

“The current global surplus has been underpinned by a robust growth in oil supply since the start of 2025, with non-OPEC+ producers accounting for close to 60% of the 3 million b/d total increase. Saudi Arabia has led the rise in OPEC+ supply following the unwinding of production cuts, while the Americas quintet of the US, Canada, Brazil, Guyana, and Argentina has dominated non-OPEC+ increases. Barring any significant sustained disruptions to output – and if OPEC+ stays the course with its current production policy and activity in the US shale patch avoids major downshifts – global oil supplies could increase by a further 2.5 million b/d in 2026,” IEA said.

Global refinery crude throughput surged by 2 million b/d in December to 85.7 million b/d, above levels seen before seasonal maintenance in first-quarter 2026 in the US, Europe, the Middle East, and Asia. Crude throughput is projected to average 84.6 million b/d in 2026, an annual increase of 770,000 b/d, lower than the 930,000 b/d increase in 2025. Refinery margins fell sharply in December, mainly due to declining profitability in Europe, with middle distillate crack spreads halving from their November highs.

In November 2025, global observed oil inventories surged by 75.3 million bbl, or 2.5 million b/d, with crude oil accounting for 96% of the increase, mainly in onshore stocks. OECD industrial stocks increased by 7.3 million bbl to 2.84 billion bbl, broadly in line with the 5-year average. Total observed oil inventories were 433 million bbl higher than at the start of 2025, an average increase of 1.3 million b/d. Preliminary data shows that global inventories increased further in December, mainly due to a rise in refined product inventories.