The international crude oil market outlook has become increasingly uncertain as OPEC and the International Energy Agency (IEA) present completely contradictory assessments of oil supply and demand conditions. OPEC's forecast for global crude oil demand in 2026 is twice that of the IEA's projection, while simultaneously downgrading non-OPEC+ supply growth expectations and emphasizing market tightening. The IEA, however, believes that as OPEC+ gradually releases production capacity and non-OPEC+ output continues growing, crude oil supply growth will significantly exceed demand growth in the next two years, making record supply surplus inevitable. Industry experts suggest that both OPEC and IEA are important players in the global crude oil market, and intensifying forecast divergence will send confusing or even contradictory signals to the market, exacerbating short-term volatility.

OPEC Optimistic About Crude Oil Demand Outlook

On August 12, OPEC revised upward its 2026 global crude oil demand growth estimate based on stronger economic performance in key global regions and improved economic expectations in major oil-consuming areas. The organization now projects global crude oil demand to increase by 1.38 million barrels per day to 106.5 million barrels per day in 2026, while maintaining this year's demand growth forecast at 1.29 million barrels per day to 105.1 million barrels per day.

While raising its 2026 global demand forecast, OPEC downgraded production growth expectations for non-OPEC+ oil-producing countries, further reinforcing its "tight oil market" stance.

OPEC stated that non-OPEC+ oil-producing countries' output will increase by 800,000 barrels per day to 54 million barrels per day this year, with the United States, Brazil, Canada, and Argentina leading non-OPEC+ production growth. The U.S. output is expected to increase by 310,000 barrels per day, making it the largest driver of non-OPEC+ crude oil production growth this year. However, by 2026, Brazil is expected to replace the United States as the main driver of annual production growth among non-OPEC+ oil-producing countries, with Brazil projected to increase by 160,000 barrels per day and the U.S. by 130,000 barrels per day in 2026.

Some analysts point out that low oil prices create pressure on OPEC member countries' fiscal budgets, making them face greater challenges in balancing production and prices. Currently, OPEC's primary goal is to reclaim market share previously lost due to years of production cuts, which has been captured by U.S. crude oil.

Notably, OPEC+ has explicitly stated it will reduce production cuts faster than originally planned, thereby releasing more crude oil to the market. This move is consistent with OPEC's decision to raise global crude oil demand forecasts.

In August, OPEC+ reached consensus to increase production by 547,000 barrels per day in September, completing the full reversal of the 2.2 million barrels per day voluntary production cut one year ahead of schedule. OPEC+ indicated that seasonal demand will absorb this additional supply while retaining the option to reassess the approximately 1.66 million barrels per day production cut plan, with any measures depending on market conditions.

IEA Warns of Record Supply Surplus

On August 13, the IEA once again downgraded global crude oil demand growth expectations, marking the sixth downward revision this year, citing weak consumption growth in major economies. The IEA noted that as OPEC+ gradually restores production and non-OPEC+ supply continues growing, global crude oil supply growth will be more rapid over the next two years, with supply growth far exceeding demand growth, leading to further oil market imbalance.

The IEA's crude oil demand forecast sits at the low end of industry predictions. According to its latest forecast, global crude oil demand this year will increase by 680,000 barrels per day to 103.7 million barrels per day, and by 699,000 barrels per day to 104.4 million barrels per day in 2026. Since the beginning of this year, the IEA has cumulatively downgraded its global crude oil demand growth estimate by 350,000 barrels per day. Meanwhile, crude oil supply is expected to increase by 2.5 million barrels per day to 102.9 million barrels per day this year, and by 1.9 million barrels per day to 104.9 million barrels per day in 2026.

The IEA warned that demand in India and Brazil is weaker than expected, Japan's consumption is at multi-decade lows, and both developed and emerging economies show weak demand with minimal possibility of sharp rebound. Combined with OPEC+ production cut slowdown and continued non-OPEC+ production increases, the world will face record crude oil supply surplus in 2026, with estimated supply potentially exceeding demand by nearly 3 million barrels per day.

Non-OPEC+ oil-producing countries will continue leading crude oil supply growth over the next two years, with production expected to increase by 1.3 million barrels per day this year and another 1 million barrels per day next year. "Clearly, adjustments are necessary to achieve market balance," the IEA emphasized.

Global Crude Oil Inventory Continues Rising

As the summer demand peak ends, global crude oil inventories are accelerating accumulation, with large-scale supply surplus potentially emerging later this year. The industry widely worries that any additional supply will further pressure an already oversupplied market. Industry sources indicate that observable global crude oil inventories increased at a rate of 1.5 million barrels per day in the second quarter, rising for the fifth consecutive month through June, reaching a 46-month high of 78.36 billion barrels in the first half of the year.

Strong summer travel has driven U.S. and European aviation fuel demand to historic highs, with global aviation fuel demand expected to grow 2.1% this year, the largest increase among all crude oil products. The IEA noted that average annual aviation fuel demand is projected at 7.7 million barrels per day this year, though still below 2019 levels. This indicates that aviation industry demand growth cannot reverse the overall weak demand trend.

Saxo Bank's Head of Commodity Strategy Ole Hansen stated that global crude oil inventories are surging at a rate of 2.96 million barrels per day, with inventory levels expected to expand further by 2026.

The U.S. Energy Information Administration also believes significant inventory accumulation will occur at year-end and early 2026, projecting global crude oil inventories to grow at over 2 million barrels per day in the fourth quarter of this year and first quarter of 2026.

Additionally, Western sanctions on Russia and Iran may suppress supply from the world's third and fifth largest oil producers, but the International Energy Agency emphasizes this remains insufficient to alleviate supply-demand mismatch.

In late July, the U.S. Treasury announced the most significant sanctions on Iran since 2018, while pressuring Russia's major crude oil buyers, particularly India, to reduce purchases. Furthermore, the EU will ban imports of refined products from Russian crude oil starting January 2026 and will set lower price caps on Russian crude oil from September 3.