IEA lowers 2025 global oil supply growth estimate by 100,000 bpd to 1.5 mln bpd, expects 600,000 bpd surplus

MOSCOW. March 13 (Interfax) - The global oil supply in 2025 will increase by 1.5 million barrels per day (bpd) to 104.5 million bpd, according to the monthly report of the International Energy Agency (IEA).

In its previous report, growth was projected at 1.6 million bpd. The new report has raised the supply estimate for 2024 by 100,000 bpd to 103 million bpd.

"Our current balances show that global oil supply could exceed demand by approximately 600,000 bpd. If OPEC+ continues to increase production after April [the alliance announced a gradual, monthly unwinding of previously adopted production cuts of 2.2 million bpd starting from April] while failing to rein in member countries that are producing above their commitments, an additional 400,000 bpd could enter the market," the IEA said.

At the same time, IEA analysts believe that OPEC+ will only be able to increase production by 40,000 bpd from April, rather than the announced 138,000 bpd, as "only Saudi Arabia, and to a lesser extent Algeria, have the capacity to increase production from February levels," it said.

IEA balances assume OPEC+ production will increase only in April, pending decisions for subsequent months.

"While the actual supply boost from the gradual unwinding of OPEC+ production cuts in April may end up being less than the nominal 138,000 bpd increase, global oil supply is already on the rise. In February, it jumped 240,000 bpd as Tengizchevroil ramped up its long-delayed Tengiz expansion project, pushing Kazakh output to all-time highs. Elsewhere, Iran and Venezuela boosted flows ahead of tighter sanctions. Venezuelan supply is expected to decline from April, when Chevron's General License to operate in the country expires," the IEA said.

OPEC+ countries increased production by 220,000 bpd in February. Iran and Venezuela, which are not subject to the alliance's restrictions, increased production by 130,000 bpd in total. Production in Iran was level with the 2024 average, and oil exports increased by 350,000 bpd, peaking for the second time since October 2018 - Donald Trump renewed oil sanctions on Iran that year.

The IEA said Russia reduced oil output, by 80,000 bpd, oil exports increased by 90,000 bpd, and oil product exports decreased by 190,000 bpd due to attacks on refineries.

The United States is currently producing at record highs and is forecast to be the largest source of supply growth in 2025, followed by Canada, Brazil and Guyana.

"Proposed U.S. tariffs on Canada and Mexico, set to take effect on April 1, may impact flows and prices from the two countries that accounted for roughly 70% of U.S. crude oil imports last year (60% from Canada and 10% from Mexico). Meanwhile, the latest round of sanctions on Russia and Iran has yet to significantly disrupt loadings, even as some buyers have scaled back purchases," the IEA said, adding that the scope and scale of tariffs remains unclear, and it is still too early to assess the impact on the market outlook.