The world’s oil demand growth is set to rise by 930,000 barrels per day (bpd) in 2026, thanks to lower oil prices and a normalization of economies after the 2025 tariff chaos, the International Energy Agency (IEA) said on Wednesday, raising its demand growth estimate by 70,000 bpd from last month.
Oil demand is forecast to grow by an average 930,000 bpd this year, accelerating from 850,000 bpd in 2025, the agency said in its closely-watched Oil Market Report for January.
In the December report, the IEA had expected global oil demand growth at 860,000 bpd for 2026.
The upgrade reflects a recovery in feedstock demand in the petrochemicals industry, on top of expectations of normalized economic conditions after the unpredictable and chaotic tariff policy of the Trump Administration last year.
The tariff threats haven’t gone away, but global trade and economies appear to have overcome the initial shock.
Despite lower output from Kazakhstan and a number of Middle Eastern OPEC producers in recent weeks, global oil supply is now projected to rise by 2.5 million bpd this year to 108.7 million bpd, following a jump of 3 million bpd in 2025, according to the IEA.
Yet, the implied surplus on the global oil market would be lower compared to last month’s estimate. In December, the IEA expected an implied surplus of 3.84 million bpd, while in the January report the implied glut is 3.69 million bpd, mostly due to the increase in the IEA’s demand growth forecast.
Inventories are rising, in both crude and products, and weigh on global oil prices, despite brief spikes driven by geopolitical developments in Venezuela and Iran, the Paris-based agency noted.
“Indeed, benchmark crude oil prices remain $16/bbl lower than a year ago, reflecting the large global supply surplus that built up over the past 12 months, in line with our forecasts,” the IEA said.
Observed global oil stocks rose by 1.3 million bpd on average in 2025, visible in the surge in oil on water, higher Chinese crude stocks, and a rise in U.S. gas liquids inventories, the agency noted.
“For now, bloated balances provide some comfort to market participants and have kept prices in check,” the IEA said.
By Tsvetana Paraskova for Oilprice.com
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