BAKU, Azerbaijan, May 30. The Oxford Institute for Energy Studies (OIES) forecasts a largely balanced global oil market in 2025, with both supply and demand expected to average 103.7 million barrels per day (mb/d), Trend reports.
However, the market is projected to shift to a 510,000 b/d surplus in 2026, as supply begins to outpace demand.
The institute’s updated outlook incorporates revisions to historical data for non-OECD countries (excluding China and India), prompting a reduction in the projected 2024 market deficit by 110,000 b/d to 360,000 b/d for the full year.
For Q2 2025, OIES expects the oil market to remain broadly balanced, with a modest 20,000 b/d surplus. However, the anticipated deficit in Q3 2025 has been deepened by 220,000 b/d to 330,000 b/d, assuming no further acceleration in production increases from the eight OPEC+ producers beyond June.
Beginning Q4 2025, the market is forecast to enter a phase of sustained surpluses, averaging 730,000 b/d over three consecutive quarters. This projection is based on the assumption that the 8-OPEC+ countries will fully unwind the remaining 2.2 mb/d of their production cuts.
By 2026, global oil supply is expected to reach 105.1 mb/d, outpacing projected demand of 104.6 mb/d, leading to a more clearly oversupplied market.
Meanwhile, OECD commercial oil stocks rose by 1.4 million barrels month-on-month at the end of March, standing 75 million barrels below their five-year average — 5 million barrels lower than OIES's previous forecast. The institute anticipates that OECD inventories will remain at this level relative to the five-year average through much of Q3 2025, before gradually realigning with the average in 2026.
Citing Kpler data, OIES notes that as of the week commencing May 18, global observed crude oil inventories were roughly in line with absolute 2024 levels and 170 million barrels below the five-year average, underscoring the current tightness in physical markets despite the expected loosening in the years ahead.
