IEA: Global oil supply to outpace demand growth despite energy security risks from Israel-Iran conflict

June 17, 2025 01:42 AM PDT | By EODHD

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IEA: Global oil supply to outpace demand growth despite energy security risks from Israel-Iran conflict — Image source: Kalkine Media

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[Oil pumpjacks at sunset with financial charts overlay.] peshkov As the Israel-Iran conflict focuses attention on immediate energy security risks, the new IEA medium-term outlook sees the global oil supply increase set to far outpace demand growth in the coming years. Amid rising geopolitical tensions and economic uncertainty, oil markets are undergoing structural shifts as key supply and demand drivers of the past 15 years weaken, the latest IEA report finds. According to the report, China, which has driven the growth in global oil demand for well over a decade, is set to see its consumption peak in 2027, following a surge in electric vehicle sales and the continued deployment of high-speed rail and trucks running on natural gas. At the same time, US oil supply is now expected to grow at a slower pace as companies scale back spending and focus on capital discipline, although the United States remains the single largest contributor to non-OPEC supply growth in the coming years. In this context, global oil demand is forecast to increase by 2.5 million barrels per day (mb/d) between 2024 and 2030, reaching a plateau of around 105.5 mb/d by the end of the decade, the agency said.

At the same time, global oil production capacity is forecast to rise by more than 5 mb/d to 114.7 mb/d by 2030. “Based on the fundamentals, oil markets look set to be well-supplied in the years ahead – but recent events sharply highlight the significant geopolitical risks to oil supply security. When it comes to energy security, there is no room for complacency," said IEA Executive Director Fatih Birol. Oil prices climbed on Tuesday as clashes between Israel and Iran extended into a fifth day, fueling concerns over a potential escalation into a wider regional conflict. MORE ON ENERGY, ETC.

* Tipping Points - How Will Markets Respond? [https://seekingalpha.com/article/4795308-tipping-points-how-will-markets-respond] * The Iran-Israel Conflict And The Likely Impact On The Market [https://seekingalpha.com/article/4795186-iran-israel-conflict-likely-impact-market] * The Commodities Feed: Oil In Focus As Israel-Iran Conflict Escalates [https://seekingalpha.com/article/4795177-commodities-feed-oil-focus-israel-iran-conflict-escalates] * Trump says G7 exit for ‘much bigger’ purpose than ceasefire talks [https://seekingalpha.com/news/4458697-trump-says-g7-exit-for-much-bigger-purpose-than-ceasefire-talks] * Crude oil pulls back as Iran seeks truce with Israel; oil producing areas mostly untouched [https://seekingalpha.com/news/4458662-crude-oil-pulls-back-as-iran-seeks-truce-with-israel-oil-producing-areas-mostly-untouched]

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