With supply surging and demand growth slowing, global crude oil inventory increases in 2025 reach the highest level since 2020

On February 12, the International Energy Agency (IEA) released its latest monthly report, indicating that with a surge in supply and a slowdown in demand growth, the global crude oil inventory accumulation rate in 2025 will be the fastest since 2020. The total inventory is expected to increase by 477 million barrels for the year, with OECD countries' inventories exceeding the five-year average for the first time in four years.

The IEA has simultaneously lowered its oil demand growth forecast for this year, citing an uncertain economic outlook and persistently high oil prices suppressing consumption. It is expected that the global daily supply surplus in 2026 will exceed 3.7 million barrels, potentially setting a new historical high for annual surplus levels.

However, oil prices have not weakened alongside the fundamentals. This week, Brent crude oil briefly surpassed $70 per barrel, with geopolitical risks being a major driving force. The IEA stated that "the relatively tight pricing center inventory" provides short-term support for the market.

Traders are currently focused on whether the surplus will spread to the Atlantic Basin. The IEA noted that when the surplus crude oil reaches key consumption areas remains a core variable affecting subsequent price trajectories.

Supply-Demand Imbalance Drives Inventory Surge

Global crude oil inventories are expected to increase significantly by 477 million barrels in 2025, primarily driven by a simultaneous reversal on both the supply and demand sides. On the supply side, OPEC+ has resumed previously suspended production under Saudi leadership, while oil-producing countries in the Americas, including the United States, Brazil, Canada, and Guyana, continue to expand production, creating dual supply pressure.

On the demand side, signs of fatigue are evident. The IEA estimates that global oil demand growth will slow to an average of 769,000 barrels per day in 2025. The agency projects that demand will grow by an average of 849,000 barrels per day in 2026, reaching a total of 104.87 million barrels per day, which is lower than predictions from Wall Street institutions like Goldman Sachs.

Entering January 2026, global crude oil supply contracted, with monthly production plummeting by 1.2 million barrels per day. The IEA did not specify a clear cause for this, but geopolitical risks and regional production disruptions are considered major influencing factors.

OPEC+ Decision Becomes a Key Variable

The actual scale of the global crude oil supply surplus this year largely depends on OPEC+'s next production decision. The alliance faces adjustment pressure after significantly increasing production last year and has agreed to pause production increases in the first quarter, with a meeting scheduled for March 1 to make a crucial decision on whether to resume production increases.

On the demand side, the IEA has lowered its oil demand growth forecast this month, reversing last month's upward trend, reflecting a more cautious outlook on the market. Although the record supply surplus in 2026 is anticipated, geopolitical risks and supply disruptions in multiple regions continue to provide downward support for oil prices