The IEA published its monthly Oil Market Report this morning, notably lowering its global oil demand forecast for the rest of the year by 400kb/d, resulting in 730kb/d of year-on-year growth in 2025. This comes after tariff-induced increased recessionary risk, with half of the demand downgrade occurring in the US and China, and the remainder in trade-sensitive Asian economies. Despite the weaker demand outlook, Asia remains the driver behind demand in 2025, still accounting for c. 60% of year-on-year growth. Supply growth continued to be led by non-OPEC regions in March, but the IEA has now cut its non-OPEC supply growth by 220kb/d for 2025 due to an expected decrease in US and Venezuelan output for the rest of the year. With the deteriorating economic outlook, the IEA expects US shale to be the crude supply to impacted first, in line with our comments on US onshore breakevens in our note this morning: BIG OIL: Pin the tail on the donkey. Overall, the IEA now sees the global oil market as c. 700kb/d oversupplied in 2025.
Demand:
. Global oil demand forecast lowered by c. 400kb/d for the remainder of the year, resulting in 730kb/d growth in 2025, much lower than OPEC and EIA which both forecast at least 1.3mb/d year-on-year demand growth.
. Oil demand in 2026 is estimated at 104.2mb/d, equivalent to 690kb/d growth in 2026 vs 2025.
. The Asia Pacific region still accounts for c. 60% of 2025 demand growth and 75% of 2026 oil demand growth.
Supply:
. Global supply growth for 2025 has been cut by 260kb/d this month, with 220kb/d coming out of non-OPEC supply due to an expected decrease in US and Venezuelan output for the rest of the year.
. OPEC decided to increase its May monthly production target of 138kb/d to 411kb/d, higher than expectations.
. On a monthly basis, global oil supply increased by 590kb/d to 103.6mb/d in March, led by the US as production recovered from earlier weather-related outages and other non-OPEC regions (Norway, Brazil,...
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