IEA Warns of 4M Barrel Daily Oil Glut by 2026 as Demand Lags

According to the latest report from the International Energy Agency (IEA), the world is producing more oil than it can use, and by 2026, there could be a glut of 4 million excess barrels per day entering the market. This warning comes as the IEA's energy outlook report, which includes a scenario where global oil demand continues to grow until 2050, has faced criticism for underestimating the pace of electric vehicle adoption, particularly in developing countries in Asia.

The IEA, which was set up after the 1973 oil crisis to monitor global supplies, points to a slower-than-usual growth in the world's oil demand as the reason for the growing glut. The agency now expects global oil supply to grow by about 3.1 million barrels per day in 2025 and by 2.5 million barrels per day in 2026, each up by about 100,000 barrels per day from the previous month's forecast.

In contrast, the outlook for renewable energy is much more promising. The IEA report suggests that the world is likely to build more renewable energy projects in the next five years than had been rolled out over the past 40 years. The Global Wind Energy Council (GWEC) has stated that there is now "irreversible momentum towards the age of electricity," with renewable energy growing faster than any other major energy source in every IEA scenario.