The International Energy Agency (IEA) has warned that the world faces a significant oil oversupply, with a potential glut of 4 million barrels per day by next year. The Paris-based watchdog said the surplus in 2026 is likely to be larger than previously forecast, despite a decision by major oil producers to pause plans to increase exports.
The IEA attributed the growing glut to slower-than-usual growth in global oil demand, while supply continues to rise. “Global oil market balances are looking increasingly lopsided, as world oil supply is forging ahead while oil demand growth remains modest by historical standards,” the agency said in its monthly report.
The warning comes as the IEA published its energy outlook report, which includes a controversial scenario where global oil demand continues to grow until 2050. This scenario, which takes a conservative view of climate action, was dropped in 2020 after criticism that the IEA underestimated renewable energy growth. It was reintroduced this year following calls from the White House for a more optimistic view of oil's future, though the IEA denies bowing to US pressure.
Critics argue the forecast underestimates the pace of electric vehicle adoption, particularly in developing Asian countries, which is already curbing oil demand. The IEA's report, released as leaders gather for the Cop30 climate talks in Belém, Brazil, also includes two main scenarios where oil consumption peaks by 2030 due to strong uptake of EVs and renewables.
In all scenarios, renewable energy is expected to at least double over the next five years, with the world likely to build more renewable projects in that period than in the past 40 years. The Global Wind Energy Council (GWEC) said there is “irreversible momentum towards the age of electricity,” with renewables growing faster than any other major energy source.
The IEA now expects global oil supply to grow by about 3.1 million barrels per day (bpd) in 2025 and 2.5 million bpd in 2026, each up by around 100,000 bpd from previous estimates. With supply outpacing demand, the agency projects total oil supply will exceed demand by 4.09 million bpd in 2026, up from an implied surplus of 3.97 million bpd in last month's report.
