Global Oil Supply to Exceed Demand by 3.73mbpd in 2026, Says IEA

Ndubuisi Francis in Abuja

The International Energy Agency (IEA) has projected that global oil supply would exceed demand by 3.73 million barrels per day (mbpd) in 2026, although world demand is to rise more slowly than expected in the  year.

The projection, which was made in its February Oil Market Report came amid revelation by the Organisation of Petroleum Exporting Countries (OPEC) that Nigeria failed to meet its crude oil production quota of 1.5 million barrels per day which it approved in the first month of 2026, extending the country’s streak of underperformance to six consecutive months.

According to the IEA report, world oil demand will rise more slowly than expected this year, warning that the global market still faces a sizable surplus despite outages that cut supply in January.

In the report, the IEA projected that global supply would exceed demand by 3.73 mbpd in 2026, broadly unchanged from that of January.

A surplus of that scale would equal almost 4 per cent of world demand and is larger than other forecasts, it indicated.

IEA projected global oil demand to increase by 849,000 barrels per day in 2026, a downward revision from the agency’s January estimate, which had projected demand growth of 932,000 bpd for the year.

The adjustment represents a reduction of 83,000 bpd in the outlook.

The IEA said “economic uncertainties and higher oil prices” were weighing on consumption.

Supply has risen faster than demand largely because OPEC+ plus Russia and other allies – began increasing output in April 2025 after years of cuts.

Other producers, such as the U.S., Guyana, and Brazil, have also lifted production.

OPEC+ has, however, paused its output hikes for the first quarter of 2026.

Eight members will meet on March 1 when they are expected to decide whether to resume the hikes in April.

Global oil supply plunged by 1.2 million bpd in January to 106.6 million bpd after the outages in Kazakhstan and elsewhere, the IEA said.

With supply cut at the start of the year, the agency trimmed its projection for 2026 supply growth to 2.4 million bpd from 2.5 million bpd last month.

OPEC+ pumped 43.3 million bpd of crude in January, down 160,000 bpd from December, the IEA said.

That remains far above the report’s estimate of demand for OPEC+ crude plus inventory withdrawals, which it puts at 39.7 million bpd in the first quarter and 39.6 million bpd in the second.

Data published by OPEC on Wednesday, however, pointed to a much smaller surplus in the second quarter and a supply deficit in 2026 overall if OPEC+ output stays at January levels, according to a Reuters calculation