According to the latest monthly report from the International Energy Agency (IEA) on February 12, global crude oil inventories are accumulating at the fastest pace since 2020, driven by a surge in supply and a slowdown in demand growth. Inventories are projected to increase by 477 million barrels over the year, with stockpiles in OECD countries exceeding the five-year average for the first time in four years.
The IEA has concurrently lowered its forecast for oil demand growth this year, citing uncertain economic prospects and sustained high oil prices as factors dampening consumption. It is projected that global daily supply will exceed demand by more than 3.7 million barrels in 2026, potentially setting a new record for annual surplus levels.
Despite the weakening fundamentals, oil prices have not followed suit. Brent crude briefly surpassed $70 per barrel this week, with geopolitical risks identified as a primary driver. The IEA noted that "relatively tight inventories at pricing hubs" are providing short-term support to the market.
Traders are currently monitoring whether the surplus will spread to the Atlantic Basin. The IEA indicated that the timing of when excess crude reaches key consumption regions remains a core variable influencing the future price trajectory.
The significant imbalance between supply and demand is driving the sharp rise in inventories. The projected increase of 477 million barrels in global crude stocks for 2025 is primarily driven by a simultaneous shift on both the supply and demand sides. On the supply side, OPEC+, led by Saudi Arabia, has restored previously suspended production, while producers in the Americas—including the United States, Brazil, Canada, and Guyana—continue to ramp up output, creating a dual supply pressure.
Demand, however, is showing signs of weakness. The IEA estimates that global oil demand growth will slow to 769,000 barrels per day in 2025. The agency forecasts demand to grow by 849,000 barrels per day in 2026, reaching a total of 104.87 million barrels per day, which is lower than projections from Wall Street firms such as Goldman Sachs.
Entering January 2026, global crude supply contracted, with monthly production falling sharply by 1.2 million barrels per day. The IEA did not explicitly attribute this decline to specific factors, but geopolitical risks and regional production disruptions are considered major influencing elements.
The actual scale of the global crude supply surplus this year will largely depend on OPEC+'s next production decision. Following significant production increases last year, the alliance is under pressure to adjust its strategy. It has already agreed to pause further output hikes in the first quarter and will hold a meeting on March 1 to make a crucial decision on whether to resume increasing production.
On the demand side, the IEA has downgraded its oil demand growth forecast this month, reversing an upward revision from the previous month, reflecting a more cautious outlook on market prospects. Although a record supply surplus in 2026 is already anticipated, ongoing geopolitical risks and supply disruptions in multiple regions continue to provide a floor for oil prices.