The International Energy Agency (IEA) stated on Thursday that despite OPEC+'s decision to postpone the start of production increases to April, there will be a significant surplus in the global oil market next year.

OPEC+decided last week to postpone the start of relaxing production cuts by 2.2 million barrels per day from January 2025 to April 2025, and the organization has also extended all relaxation plans until September 2026.

The IEA stated in its December oil market report that although OPEC+'s decision "significantly reduces the potential oversupply that will occur next year," the overproduction within OPEC+and strong supply growth from non OPEC+producing countries will ensure sufficient market supply next year.

Due to the uncertainty of OPEC+supply next year, IEA's latest forecast for market balance excludes the possibility of OPEC+increasing supply. Therefore, even if OPEC+maintains its oil production unchanged throughout 2025, there will still be an excess supply of 950000 barrels per day next year. According to the agency's data, if OPEC+cancels voluntary production cuts from the end of March 2025, the oversupply will surge to 1.4 million barrels per day.

The key uncertainty in the OPEC+crude oil supply trajectory remains the degree of compliance with agreed targets, and our estimates indicate that total production in November exceeded the target level by 680000 barrels per day

According to the latest estimate from the agency, global oil demand will increase by 1.1 million barrels per day next year, and consumption will rise to 103.9 million barrels per day. But the supply will exceed the demand. The IEA stated that even if OPEC+does not lift the production reduction agreement, the total oil supply is expected to increase by 1.9 million barrels per day in 2025, reaching 104.8 million barrels per day.

The IEA stated that under the leadership of the United States, Brazil, Guyana, Canada, and Argentina, the oil supply of non OPEC+countries will increase by approximately 1.5 million barrels per day in the next two years.