LONDON (Reuters) – Global oil supplies will rise faster than expected this year and the surplus could widen in 2026 as OPEC+ members and other producers increase production and demand remains weak, the International Energy Agency (IEA) predicted on Tuesday.

Supply will increase by 3 million barrels per day in 2025, compared to 2.7 million barrels per day initially forecast, the organization said in its monthly report.

Next year, supply will increase by another 2.4 million barrels per day, she added.

OPEC+, which includes the Organization of the Petroleum Exporting Countries and its allies, is pumping more crude into the market after deciding to lift some production cuts faster than planned.

This additional supply has sparked fears of a surplus and weighed on oil prices this year.

Supply is increasing much faster than demand, according to the IEA, which revised its forecast for global demand growth this year to 710,000 bpd, or 30,000 bpd less than the previous estimate, citing a more difficult economic context.

“Oil consumption will remain subdued through the remainder of 2025 and into 2026, leading to projected annual gains of around 700,000 barrels per day for both years,” the IEA said in its report.

“This is well below the historical trend, as a more difficult macroeconomic climate and the electrification of transportation lead to a sharp deceleration in oil consumption growth,” she noted.

The IEA’s demand forecast is at the lower end of the sector’s range, as the Paris-based organization expects a faster transition to renewable energy sources than some other forecasters such as OPEC, which on Monday maintained its demand outlook for this year.

(Reporting Alex Lawler; Diana Mandia, editing by Kate Entringer)

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