The International Energy Agency (IEA) said global oil supply could exceed demand by about 600,000 barrels per day this year.

In the energy market, world oil prices recorded a significant decrease, in which Brent crude futures fell 1.5%, while WTI crude fell 1.7%. Besides concerns about rising trade tensions, another important factor causing oil prices to fall is the recent forecast by the International Energy Agency (IEA) that the world could have an oil surplus of about 600,000 barrels per day this year.

According to the IEA, the oil supply outlook remains quite abundant, thanks to the US still producing at record highs and will be the biggest driver of supply growth in 2025.

The surplus could even increase by another 400,000 barrels per day if the Organization of the Petroleum Exporting Countries (OPEC) and its partners (OPEC+) increase production and do not control member countries from overproducing their quotas.

Weaker-than-expected demand also contributed to the oversupply. The IEA revised its oil demand growth forecast down to around 1 million barrels per day, down 70,000 barrels from its previous forecast, due to the uncertain macroeconomic environment.

Demand in the final quarter of 2024 and the first quarter of this year was lower than expected “in a context of macroeconomic uncertainty,” the IEA added.

The IEA said that the new US tariffs, along with escalating retaliatory measures, have increased macro risks. The organization said that recent oil demand data has missed expectations, and growth forecasts for Q4/2024 and Q1/2025 have been revised down slightly.