Crude oil benchmarks fell on Wednesday after the International Energy Agency (IEA) cut its global oil demand forecast for the fifth consecutive month, citing sluggish consumption in major economies and a subdued outlook for 2026.
Market Snapshot (Aug. 13, 2025)
- Brent Crude: $65.04 (-1.63%)
- WTI Crude: $62.00 (-1.85%)
- Murban Crude: $67.35 (-1.55%)
- Natural Gas: $2.801 (-0.25%)
The IEA now projects global oil demand to rise by just 680,000 barrels per day (bpd) in 2025 and 700,000 bpd in 2026, reaching 104.4 million bpd. This marks a 20,000 bpd downward revision from July’s estimates and a cumulative cut of 350,000 bpd since January.
According to the agency, “lacklustre demand across the major economies” has stifled any prospects of a near-term rebound, with China, Brazil, Egypt, and India all posting weaker-than-expected consumption. Jet fuel remains the sole bright spot, with demand set to grow 2.1% this year, though volumes will still lag pre-pandemic levels by around 180,000 bpd.
Supply Growth Outpaces Demand
While trimming demand estimates, the IEA raised its global supply growth forecast by 370,000 bpd to 2.5 million bpd for 2025. This adjustment follows OPEC+’s early August decision to boost production by 547,000 bpd in September, fully reversing cuts introduced in late 2023.
The agency cautioned that even with potential constraints from sanctions on Russia and Iran, “market balances look ever more bloated” as output from both OPEC+ and non-OPEC producers is set to exceed demand well into 2026.
Industry Implications
- Downstream refiners may face margin compression if crude remains under pressure.
- Physical traders could see a widening contango structure, encouraging storage plays.
- Producers might reassess upstream spending plans as price volatility and weaker fundamentals persist.
OPEC, by contrast, maintains a more bullish stance, expecting 2026 demand growth to strengthen on the back of recovering global economic activity.
With bearish sentiment reinforced by today’s data, market watchers now anticipate further downside risks unless global consumption surprises to the upside or supply discipline re-emerges.