International Energy Agency or IEA stated in a latest monthly update that global oil demand growth for 2025 has been revised down by 300 kb/d since last month’s Report to 730 kb/d, as escalating trade tensions have negatively impacted the economic outlook. Growth is expected to slow further in 2026, to 690 kb/d, but risks to the forecasts remain rife given the fast-moving macro backdrop. The downgrade comes on the heels of robust oil consumption in 1Q25, up by 1.2 mb/d y-o-y – its strongest rate since 2023.
World oil supply rose by 590 kb/d to 103.6 mb/d in March, up 910 kb/d y-o-y, with non-OPEC+ leading both monthly and annual gains. OPEC+ will lift output targets by 411 kb/d in May, but the increase may be substantially lower given overproduction by some countries. Global supply growth for 2025 has been cut by 260 kb/d to 1.2 mb/d, due to a decrease in US and Venezuelan output. Production in 2026 is set to rise by 960 kb/d, with offshore projects taking the lead.
Global crude runs are forecast to average 83.2 mb/d this year, as demand growth expectations cut the projected annual increase by 230 kb/d to 340 kb/d. In 2026, throughputs are set to rise by 360 kb/d to 83.6 mb/d. Refining margins were mixed in March, with declines in the Atlantic Basin but gains for processing sour crude in Singapore. Weaker middle distillate cracks drove much of last month’s decline in profitability.
Global observed oil inventories rose by 21.9 mb to 7 647 mb in February but still hovered near the bottom of the five-year range. Crude, NGLs and feedstocks surged by 41.2 mb, of which OECD onshore stocks accounted for 14.1 mb. Oil products fell by 19.2 mb as a 34.2 mb reduction in the OECD overwhelmed gains in oil on water. Preliminary data indicate global oil stocks increased further in March, led by crude builds in the non-OECD and oil on water.
According to the IEA, global oil prices tumbled by around $10/bbl in March and early April as risk sentiment soured in the wake of proliferating US tariffs and mounting recession fears. The decision by some OPEC+ members to accelerate the unwinding of extra voluntary production cuts added to the bearish momentum.