IEA Shock Report: Oil Market Supply-Demand Balance Spirals Into Chaos

The oil market''s playing Jenga with global stability—and the IEA just yanked the wrong block.

Supply chains snap as demand outpaces production

Refineries are scrambling like day traders after a Fed announcement. Storage tanks? Barely keeping up. The so-called ''balanced market'' now looks like a Wall Street analyst''s fantasy—the kind they pitch between martinis at Davos.

Geopolitical tremors meet economic gravity

Sanctions, shutdowns, and speculative algorithms are turning crude into a volatility pinball. Meanwhile, traditional hedgers are getting steamrolled by algo-driven swings—proving once again that markets eat ''efficient pricing'' theories for breakfast.

The closer: If you think this imbalance gets fixed before the next Bitcoin halving, we''ve got some ''risk-free'' oil futures to sell you.

China’s oil demand now expected to peak by 2027

In the second part of its study, the IEA looked ahead to 2030. It said that global oil supply WOULD keep growing faster than demand, boosting production capacity by more than 5 million b/d to 114.7 million b/d by the decade’s end. Demand is seen rising by only 2.5 million b/d between 2024 and 2030, reaching a plateau of about 105.5 million b/d.

The IEA now forecasts that China’s oil use will peak in 2027 at a maximum of 16.9 million b/d, roughly two years earlier than previous estimates. It said rising electric vehicle sales, more high-speed rail and trucks running on natural gas will cut into crude consumption.

China National Petroleum Corp. warned in December that demand might peak even sooner.

“Oil markets look set to be well supplied in the years ahead,” IEA Executive Director Fatih Birol said. The agency, which was set up in the 1970s to advise major oil consumers, noted that recent fighting had triggered price jumps but left actual exports untouched.

Oil prices spiked the most in three years after Israel struck Iran, then eased back to around $70 per barrel by Monday.

The IEA sees consumption peaking at about 105.5 million b/d in 2029, roughly in line with its previous outlook. After that, it predicts a slight drop in usage in 2030, as emerging markets like India provide most of the modest gains in consumption.

With China’s demand peaking, the IEA sees India and other developing countries as the main sources of demand growth to 2030.

U.S. oil demand revised up as EV shift slows

The report says that oil demand in the U.S. was revised up by about the same amount that China’s was revised down. This is because the U.S. is moving more slowly toward electric vehicles. Even so, U.S. oil production is still expected to keep growing.

Ahead of 2030, global oil production capacity is expected to grow by about 5.1 million b/d, according to the IEA, roughly double the total rise in demand over the same period.

The United States will remain a leading producer, joined by gains in Brazil, Canada and Guyana. Still, the agency warns that OPEC+ may find it hard to win back significant market share.

Not every major oil player agrees with the IEA’s view.

Vitol, the world’s biggest independent trader, and some banks such as Bank of America have said that global demand might not peak until after 2030.

Others, including the Organization of the Petroleum Exporting Countries, still expect demand to rise well beyond the middle of the century, though OPEC has already pulled back overly bullish short-term outlooks in recent years.

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