The International Energy Agency or IEA has stated in a latest update that as Israel-Iran conflict focuses attention on immediate energy security risks, new IEA medium-term outlook sees global oil supply increase set to far outpace demand growth in coming years. With intensifying geopolitical strains and heightened uncertainty about global economic prospects, oil markets are undergoing structural changes as the key drivers of supply and demand growth of the past 15 years start to fade, according to the latest edition of the IEA’s medium-term outlook.
IEA’s Oil 2025 report provides in-depth analysis of the latest data and forecasts for evolving oil supply, demand, refining and trade dynamics through to 2030. It highlights several important trends that could considerably reshape global oil markets over the medium term. According to the report, China – which has driven the growth in global oil demand for well over a decade – is set to see its consumption peak in 2027, following a surge in electric vehicle sales and the continued deployment of high-speed rail and trucks running on natural gas. At the same time, US oil supply is now expected to grow at a slower pace as companies scale back spending and focus on capital discipline – although the United States remains the single largest contributor to non-OPEC supply growth in the coming years.
In this context, global oil demand is forecast to increase by 2.5 million barrels per day (mb/d) between 2024 and 2030, reaching a plateau of around 105.5 mb/d by the end of the decade. At the same time, global oil production capacity is forecast to rise by more than 5 mb/d to 114.7 mb/d by 2030. This growth is set to be dominated by robust gains in natural gas liquids (NGLs) and other non-crude liquids. The strategic shift towards higher non-crude capacity is driven by strong global demand for petrochemical feedstocks and the development of liquid rich gas resources.
The OPEC+ alliance has started to unwind production cuts, reshuffling oil supply trajectories. However, the report finds that increased output from the United States, Canada, Brazil, Guyana and Argentina is set to be more than sufficient to cover the growth in global demand in the coming years. In the absence of major supply disruptions, the latest medium-term forecast sees a comfortably supplied oil market through 2030 – though significant uncertainties remain, especially given rising geopolitical risks and heightened trade tensions.