IEA Oil Market Outlook 2026: key takeaways in one read

The latest IEA oil market report sketches a world moving into 2026 with ample supply, slower demand growth, and a sizable buffer against shocks.

Below are the most relevant points, explained clearly and point by point.

1. Demand growth slows, but remains positive

Global oil demand is expected to grow by 930 kb/d in 2026, up slightly from 850 kb/d in 2025.

This reflects a normalization of economic activity after last year’s tariff disruptions and lower oil prices compared with a year ago. 

Growth will come entirely from non-OECD countries, while OECD demand remains flat.

A rebound in petrochemical feedstocks will help demand, but gasoline growth continues to slow, highlighting structural efficiency gains and changing consumption patterns.

2. Supply keeps outpacing demand

Global oil supply stood at 107.4 mb/d in December, down from September’s peak but still robust.

For 2026, the IEA projects supply to rise by 2.5 mb/d, far above expected demand growth. 

Non-OPEC+ producers account for most of the increase, led by the United States, Canada, Brazil, Guyana, and Argentina.

OPEC+ supply is also rising as production cuts unwind, with Saudi Arabia playing a central role.

3. Refining activity normalizes

Refinery throughputs surged to 85.7 mb/d in December, ahead of seasonal maintenance in early 2026.

For the year, runs are forecast to average 84.6 mb/d, with growth slowing compared to 2025. 

Refining margins weakened late in the year, particularly in Europe, where middle distillate margins fell sharply, signaling softer downstream profitability.

4. Inventories are the market’s shock absorber

Global observed oil stocks rose by 470 mb in 2025, averaging 1.3 mb/d of builds. OECD industry stocks sit close to their five-year average, while large increases were seen in oil on water, Chinese crude stocks, and US gas liquids. 

This inventory overhang is the main reason markets have absorbed geopolitical shocks without sustained price spikes.

5. Prices reflect surplus, not fear

Despite temporary spikes linked to tensions in Iran and Venezuela, crude prices remain about $16/bbl lower than a year ago.

Brent briefly moved toward $66/bbl in early January before easing back as markets refocused on fundamentals. 

Supply disruptions in Iran, Venezuela, Kazakhstan, and the Black Sea region have so far been offset by strong output elsewhere, especially Russia and the Americas.

6. The big picture: a comfortable buffer

Even with geopolitical risks, the oil market enters 2026 with a significant supply cushion.

Unless there are major, sustained disruptions or a sharp policy shift by OPEC+, supply growth and high inventories should keep prices under control.

For producers, traders, refiners, and transport operators, 2026 looks less like a scarcity-driven market and more like one defined by logistics, margins, and efficiency.

The buffer is large , and that changes how risk is priced.

IEA Oil Market Outlook 2026: key takeaways in one read