IEA forecasts softening in oil demand growth
By Josh White
Date: Thursday 12 Feb 2026
(Sharecast News) - The International Energy Agency said on Thursday that global oil demand growth would slow in 2026 and that the market was set to remain in sizable surplus, even as prices have risen on geopolitical tensions and weather-related supply disruptions.
In its February Oil Market Report, the IEA forecast world oil demand to rise by 850,000 barrels per day in 2026, down 80,000 daily barrels from last month's estimate and compared with growth of 770,000 barrels per day in 2025.
The agency cited "economic uncertainties and higher oil prices" as weighing on consumption.
As in 2025, non-OECD economies will account for the entire increase, with China contributing around 200,000 bpd.
Petrochemical feedstocks are expected to represent more than half of this year's demand gains, compared with roughly a third last year when transport fuels drove growth.
The IEA projected that global oil supply would exceed demand by 3.73 million bpd in 2026, equivalent to about 4% of world consumption and broadly unchanged from last month's outlook.
Although global supply plunged by 1.2 million bpd in January to 106.6 million bpd, largely due to severe winter weather in North America and export constraints in Kazakhstan, Russia and Venezuela, output is forecast to rebound and rise by 2.4 million bpd in 2026 to 108.6 million bpd.
That compared with growth of nearly 3.1 million bpd in 2025.
January's drop included roughly 860,000 bpd of shut-ins in the United States and 220,000 bpd in Canada.
Kazakh supply was hit by prolonged disruptions at its main export terminal and a power outage at its largest oil field.
Russian output fell by 350,000 bpd amid tighter Western sanctions, with shipments to India dropping to 1.1 million bpd in January from an average 1.7 million bpd in 2025, while flows to China surged to a record high.
Venezuelan production declined by 210,000 bpd month on month to 780,000 bpd but was expected to recover following US authorisation for certain companies to resume exports.
Despite the temporary tightening, OPEC+ had reaffirmed plans to maintain current production quotas through March.
The IEA said supply growth in 2026 would be roughly evenly split between OPEC+ and non-OPEC+ producers, including the United States, Guyana and Brazil.
Global oil inventories continued to build. Observed stocks rose by 37 million barrels in December, bringing total builds in 2025 to 477 million barrels, or 1.3 million bpd on average, the largest increase since 2020.
Chinese crude stocks rose by 111 million barrels last year, while oil held on water increased by 248 million barrels, of which 72% was sanctioned crude.
Preliminary data indicate a further 49 million barrel increase in January, with OECD industry stocks surpassing their five-year average for the first time since 2021.
Refinery crude runs eased from a record 86.3 million bpd in December to 85.7 million bpd in January as maintenance began and margins weakened.
Throughputs were forecast to rise by an average 790,000 bpd to 84.6 million bpd in 2026, led by non-OECD regions.
Reporting by Josh White for Sharecast.com.
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