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By Grant Smith
Global oil stockpiles accumulated last year at the strongest pace since the 2020 pandemic as supplies soared and demand growth slowed, according to the International Energy Agency.
Inventories increased by an “extraordinary” 477 million barrels in 2025, with stocks in OECD nations surpassing their five-year average for the first time in four years, the adviser to major economies said in its monthly oil report.
The build-up adds to evidence that a long-anticipated oil surplus did materialize last year, even if its concentration in China — rather than more visible storage regions — blunted the impact on crude prices. Many traders say crude’s trajectory now hinges on whether the glut spreads elsewhere.
“It remains to be seen when surplus barrels finally move ashore in the Atlantic Basin,” the Paris-based IEA said.
The agency trimmed forecasts for growth in oil demand this year, reversing last month’s boost, as “economic uncertainties and higher oil prices weigh on consumption.” It continues to project a glut of just over 3.7 million barrels a day for 2026, which would be a record in annual average terms.
Nonetheless, crude futures have proved surprisingly strong so far, spiking to $70 a barrel in London this week on concerns of a US military strike against Iran and an array of supply disruptions, from North America to Kazakhstan and Venezuela. World production plunged by 1.2 million barrels a day in January, the IEA said.
“Relatively tight crude inventories in key pricing hubs put a floor for prices in a turbulent market facing numerous supply risks,” the agency said.
Last year, inventories piled up as the OPEC+ alliance led by Saudi Arabia revived halted production while the group’s rivals in the Americas — the US, Brazil, Canada and Guyana — continued to expand.
At the same time, global demand growth slowed to 769,000 barrels a day in 2025 as China’s fuel use cooled, the IEA estimates. It expects consumption will increase by 849,000 barrels a day this year — a lower figure than that of some Wall Street forecasters like Goldman Sachs Group Inc. — to average 104.87 million a day.
The scale of oversupply this year may depend on the Organization of the Petroleum Exporting Countries and its allies. The coalition agreed to pause output increases during the first quarter after last year’s vigorous ramp-up, and will meet on March 1 to decide whether to resume hiking production.
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