Source: Sharecast
According to the latest monthly report from the Paris-based organisation, which advises industrialised countries, world production is now expected to rise by 2.7m barrels per day (bpd) to 105.5m bpd this year.
The figure is up on its previous guidance for 2.5m bpd.
The IEA attributed the increased forecast to Opec and its allies - known as Opec+ - continuing to unwind output cuts. Supply from non-Opec+ producers, including the US, Brazil and others, is also near all-time highs.
Supply was also forecast to continue climbing into 2026, by 2.1m bpd to 107.9m bpd.
Demand for oil, meanwhile, was predicted to increase by 740,000 bpd year-on-year in 2025, up marginally from last month’s report.
The IEA noted that "resilient deliveries in advanced economies [were] contrasting with relatively muted consumption in emerging economies".
It continued: "OECD demand growth of 80,000 bpd year-on-year in the first half has exceeded expectations, supported by lower oil prices, but is forecast to move into contraction in the remainder of the year, leaving 2025 annual oil use broadly flat."
The IEA warned that global stocks were slated to rise by an "untenable" 2.5m bpd on average in the second half, as supply "far outstrips demand".
However, it added: "There are a number of potential twists and turns ahead, including geopolitical tensions, trade policies and additional sanctions on Russia and Iran, that could yet alter market balances."
