The International Energy Agency (IEA) has once again lowered its global oil demand growth forecast for 2025 to 680,000 barrels per day (bpd), down from previous estimates of around 700,000 bpd.

This reflects oversupply and weak consumption across major economies like China, India, and Brazil. This marks the slowest demand growth since 2009, excluding the impact of Covid-19.

Simultaneously, the IEA raised its supply forecast significantly, expecting an increase of 2.5 million bpd in 2025, and 1.9 million bpd in 2026, driven by both OPEC+ ramping up production and continued growth from non-OPEC regional producers.

This widening gap between supply and demand suggests a growing oversupplied market, possibly reaching a surplus of nearly 3 million bpd by 2026.

Fuel will become cheaper

The agency predicts that the cost of a barrel (159 liters) of Brent crude, the benchmark for oil from the Middle East and the North Sea, will fall to $58 next year. This year, it has averaged $69.

With supply outpacing demand, global oil prices are likely to remain under pressure or even decline further. If the surplus persists or grows, retail prices at the pump (e.g., gasoline, diesel) could ease, offering relief to consumers—provided that refining margins, local taxes, and distribution costs don’t nullify the effect.

However, while fundamentals point toward easing prices, events like Middle East conflicts or stricter sanctions (e.g., on Russia or Iran) could still trigger short-term spikes.

‘Rebalance the market’

Demand for crude oil is expected to increase by less than half this year and next compared to 2023. Furthermore, the oil cartel OPEC+ has decided to increase its oil production. According to the IEA, we are heading for a record crude oil surplus. “Something will have to be done to rebalance the market,” the IEA states.

And what will be the impact on Belgium and other European countries? Oversupply typically pushes crude oil prices lower, which may translate into cheaper gasoline and diesel at the pump.

However, maybe not immediately. Fuel prices in EU countries tend to mirror global crude movements, but the speed and size of this effect can vary due to taxes, import costs, and refining margins. Even if oil prices drop, rising refining margins or local cost pressures (like those affecting diesel) could dampen retail price falls.