2025 expected to see record global oil supply increase

This year, the global oil market may see the highest increase in supply in ten years. Analysts at Raymond James project nearly 3 million barrels of oil daily will be added to the market. Key projects include the Tengiz field in Kazakhstan and the Bacalhau field in Brazil, both significant oil sources. However, this increase in supply depends on oil prices. If prices stay low, production may slow down. Many experts believe demand is weak, with low growth expected, especially in China. Recent data shows that China's oil import figures do not match optimistic predictions for demand growth. The U.S. Energy Information Administration estimates a global supply overhang of about 100,000 barrels per day, while Raymond James suggests it could be around 280,000 barrels. The International Energy Agency predicts the most pessimistic number with 600,000 barrels daily in overhang this year. Despite the potential increase in supply, it might not reach the market. U.S. oil executives are cautious about increasing production due to low prices. Some believe drilling at will is now uneconomical. Saudi Arabia is also restricted by OPEC+ production targets, which complicates future growth. The situation could change if there are more sanctions on Iran’s oil exports, potentially tightening supply and allowing new production to come online. Currently, Iran exports about 1.6 million barrels daily. While last year's new oil output was only 800,000 barrels daily, this year's expected figures are substantial. The head of the International Energy Agency recently emphasized the need for investment in oil and gas fields to ensure global energy security. This marks a shift in his stance, acknowledging that demand for oil continues, even if it grows at a slower rate.