Informist, Friday, Jul. 11, 2025

MUMBAI – The International Energy Agency has once again lowered its forecast for growth in global oil demand for 2025 by 20,000 barrels per day to 700,000 barrels per day. The agency has also lowered its forecast for growth in global oil demand for 2026 to 720,000 barrels per day from 740,000 barrels per day in its previous forecast.

The Paris-based autonomous intergovernmental organisation expects world oil supply to rise by 2.1 million barrels per day to 105.1 million barrels per day in 2025 and by an additional 1.3 million barrels per day to 106.4 million barrels per day in 2026, led by growth in nations outside the Organization of the Petroleum Exporting Countries and its allies. Countries outside the cartel are expected to add 1.4 million barrels per day of supply this year and 940,000 barrels per day in 2026.

Global oil supply increased by 950,000 barrels per day month on month to 105.6 million barrels per day in June, led by Saudi Arabia. Oil supply in June rose by 2.9 million barrels per day year on year, of which OPEC and allies accounted for 1.9 million barrels per day.

Despite forecasts of a hefty surplus in the oil market, the agency said increasing refinery runs to meet the northern hemisphere's summer travel demand were tightening supply in the global oil market. Following an on-month increase of 1.7 million barrels per day in June, global refinery runs are set to rise by a further 2 million barrels per day over July and August to reach a seasonal peak of 85.4 million barrels per day. Refinery runs will increase by 500,000 barrels per day in 2025 and 460,000 barrels per day in 2026 to an average 83.3 million barrels per day and 83.8 million barrels per day, respectively, it added.

"...the seasonality in crude runs to meet Northern Hemisphere summer travel demand is boosting refinery throughputs by 3.7 mb/d (million barrels per day) from May to August," the agency said. "The typical doubling in crude burning for power generation over the same period, to around 900 kb/d (thousand barrels per day), further tightens the market."

Benchmark crude oil prices rose by around $7 per barrel on average in June, trading in a wide range between $65 per barrel and $80 per barrel. "Israel's air strikes on Iranian military and nuclear targets sent prices soaring mid-month, with North Sea Dated briefly surpassing $80/bbl before returning to pre-conflict levels after a ceasefire accord was reached," it said.

At 1458 IST, the most-active September Brent Crude contract on the Intercontinental Exchange was steady at $68.64 per barrel. The August West Texas Intermediate Crude contract on NYMEX was also steady at $66.60 per barrel.

Global observed oil inventories surged by 73.90 million barrels in May to 7.82 billion barrels, led by a rise in commercial product inventories in the Organisation for Economic Cooperation and Development countries and crude oil inventories in non-OECD countries, it said. According to preliminary data for June, global oil stocks rose further, mainly on oil on water and in non-OECD countries.

Meanwhile, China's crude oil stocks surged by 82 million barrels in the second quarter of 2025, or almost 900,000 barrels per day. "China's new policies aimed at improving its energy security are positioning oil companies as long-term strategic storage partners for the government, effectively removing these volumes from the global market," the agency said. "Chinese companies are expected to continue driving the expansion of inventories, with the pace of stock building over coming months key to the market balance." End

US$1 = INR 85.80

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Reported by Ashutosh Pati

Edited by Rajeev Pai

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