Oil Glut Alert: Global Supply Surge Outpaces Demand—But Brace for Tighter Markets Ahead
Crude reality check: The pumps are winning—for now.
Supply is flooding the market faster than demand can keep up, but don’t pop the champagne just yet. Those inventory levels? They’re whispering about a squeeze coming down the pipeline.
The irony?
Traders are already pricing in scarcity while swimming in barrels. Classic Wall Street—betting on drought during a flood.
Active rigs, shipping bottlenecks, and geopolitical chess moves could flip the script overnight. When the pendulum swings, it’ll hit harder than a margin call on leverage-happy crypto bros.
Stay nimble. The only certainty here is volatility—and the fact that someone’s about to overhedge spectacularly.
The IEA expects oil demand to climb by August
The Northern Hemisphere has a higher use of oil, especially during summer travel, and the IEA expects refinery crude throughput to climb by almost 3.7 million barrels per day from May through August due to high demands by airlines and road trips.
Along with that, crude burned in refineries to generate electricity, mainly to power air conditioners, will double to about 900,000 barrels a day, it said.
Despite the seasonal boost, this year’s projected demand gain of 700k barrels per day is the least after the 2020 pandemic slump since 2009. The IEA cautioned that it is still early to pin demand headwinds on American import tariffs, and the sharpest drops have appeared in Japan, the US, Mexico, South Korea, and China.
The agency’s demand forecasts sit at the low end of industry estimates, reflecting its belief in a faster shift toward cleaner energy compared to some peers. In contrast, OPEC expects global oil use to grow by about 1.3 million barrels per day in 2025, nearly double the IEA’s figure.
Looking ahead to 2026, the IEA expects that demand will rise by 720,000 barrels per day to 20,000 barrels per day below its previous view, while supply will expand by almost 1.3 million barrels per day.
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