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The oil market still faces record oversupply next year, according to the monthly report by the International Energy Agency (IEA), but the glut estimate is now trimmed by about 230,000 barrels per day compared to the November forecast.
The market is headed to as much as 3.84 million barrels per day (bpd) of supply exceeding demand in 2026, the IEA said on Thursday in its closely-watched report for December.
While this still is a considerable glut, it’s lower than the 4.09 million bpd implied oversupply expected in the November report.
In today’s report, the IEA said that the projected global oil surplus in the fourth quarter of 2025 has narrowed since last month’s report, “as the relentless surge in global oil supply came to an abrupt halt.”
Total global oil supply dipped by 610,000 bpd in November compared to October and by a whopping 1.5 million bpd from September’s all-time high, the IEA noted.
OPEC+ accounted for 80% of the decline over October and November, reflecting significant unplanned outages in Kuwait and Kazakhstan, while oil output from sanctions-hit Russia and Venezuela plunged.
Russia’s total oil exports are estimated to have plummeted by about 400,000 bpd in November to 6.9 million bpd, as buyers assessed the implications and risks associated with more stringent sanctions.
Buyers, especially in Russia’s second-biggest crude oil customer, India, are steering clear of any Rosneft and Lukoil-related cargoes, for fear of running afoul of the U.S. Administration while India and the United States are still locked in difficult trade negotiations.
The IEA noted in its report the apparent disconnect between the current global oil surplus and inventories near decade lows at key pricing hubs.
Despite record volumes of oil piling up on water, benchmark crude oil prices eased only marginally in November, because “in stark contrast to the broader picture, crude and refined product stocks in key pricing hubs have seen only marginal builds,” the agency said.
