Oversupply of oil could create glut of 4M barrels a day, says energy watchdog

The International Energy Agency warns global oil production is outpacing demand and could produce a surplus of roughly 4 million barrels a day in 2026. The agency’s monthly report projects supply growth of about 3.1m bpd in 2025 and 2.5m bpd in 2026 (each up ~100,000 bpd from last month), and estimates a 2026 surplus of 4.09m bpd versus an implied 3.97m bpd previously. That imbalance persists despite major producers pausing plans to raise exports; the IEA attributes the looming glut mainly to slower-than-usual oil demand growth and rising uptake of alternatives such as electric vehicles and renewables.

The IEA simultaneously published an energy outlook that controversially reintroduces a scenario in which oil demand continues rising to 2050, a model critics say underestimates EV adoption in developing Asian markets; the agency denies political pressure prompted the change. Other IEA scenarios show oil peaking by 2030 as electrification and renewable deployment accelerate. Across all scenarios the agency expects renewable capacity to at least double in five years, likely adding more new projects in that period than in the previous four decades, a trend industry groups describe as irreversible and that reinforces downside risks to future oil prices and investment.