IEA Warns of Potential Global Oil Supply Glut by 2027

Global oil markets could face a significant supply surplus by 2027 as production growth outpaces demand, according to a recent outlook from the International Energy Agency (IEA), Tanya Rawat reported for Benzinga.

The resulting imbalance between supply and demand could lead to a substantial market overhang.

The agency projects that global oil supply may increase sharply over the next several years as producers in the Gulf region gradually restart previously shuttered capacity following recent geopolitical stabilization.

Overall production could rise by approximately 8 million barrels per day, reaching around 110 million barrels per day by 2027, while demand growth is expected to remain significantly slower.

The resulting imbalance could lead to a substantial market overhang, easing tight inventories and contributing to the rebuilding of strategic reserves, according to the IEA’s Oil Market Report.

Market conditions have already reflected expectations of increased supply, with Brent crude trading near $79 per barrel, down from earlier highs above $87 as geopolitical risk premiums decline.