Iea Warns Of Oil Glut

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Iea Warns Of Oil Glut

Iea Warns Of Major Oil Glut In 2026

The year 2026 will be a major one for the oil markets as the IEA forecasts a big surplus. According to the IEA, the markets will face a surplus of around 4 million barrels/day.

But why will there be an oversupply of oil in 2026? It has to do with the lifting of supply cuts by OPEC+ and a weak demand for crude oil.

Oversupply Of 3.3 Million Bpd

Earlier, the IEA was only forecasting an oversupply of 3.3 million bpd. But now, they have raised it to 4 million barrels, which is equal to around 4% of the global demand. So, the new forecast makes it clear that we can expect lower oil prices in 2026.

The agency also lowered the forecast for the demand growth of oil to just 710K bpd. That's a decline of almost 30K barrels from the earlier forecast and shows that the world's economy is expected to slow down.

The IEA report also reveals that the overall usage of crude oil will remain weak in the next year 2026. This also directly means we can expect weaker growth in the major economies.

The report also showed that the macro climate is harsh, and the electrification of transport is also affecting oil consumption. Looking ahead, a lot of economies are now moving towards renewable energy sources, which is bad news for oil.

IEA said that the oversupply will also come from other producers besides the OPEC+. This includes Brazil, Canada, the US, and Guyana.

The overall situation clearly shows that the voluntary supply cuts are coming to an end. In addition, the world is now moving away from fossil fuels like oil, and we can't deny that reality.

So, the overall sentiment remains bearish for the oil market in the next 4-5 years. As more people move towards EVs and countries move towards green energy, the oil demand will continue to decline.

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