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Global Oil Market Faces Oversupply Challenges in 2025

OPEC+ struggles to balance production cuts and market share as non-OPEC producers ramp up output, outpacing modest demand growth.

  • The International Energy Agency (IEA) forecasts a 1.1 million barrels per day (bpd) increase in global oil demand for 2025, driven primarily by emerging Asian markets, but supply is expected to exceed demand growth.
  • Non-OPEC producers, led by the U.S., Brazil, Canada, Guyana, and Argentina, are projected to increase output by 1.5 million bpd, surpassing the rate of global demand growth.
  • OPEC+ has extended voluntary production cuts until March 2025 to stabilize prices, but the group risks losing market share to non-OPEC producers, who now account for a growing majority of global supply.
  • China's slower economic growth and evolving energy policies, including a shift toward electric vehicles, have dampened its oil demand, contributing to weaker global consumption trends.
  • Oil prices are expected to remain under pressure, with Brent crude projected to average $61 per barrel in 2025, reflecting ongoing oversupply and limited demand recovery.
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