The International Energy Agency (IEA) has projected a global oil surplus of 950,000 barrels per day (b/d) in 2025, despite an extension of the OPEC+ voluntary supply cuts. If the OPEC+ nations begin unwinding these cuts by the end of March 2025, the surplus could rise to 1.4 million b/d. This trend may be beneficial for India, which imports 85% of its crude oil requirements, potentially leading to lower oil prices.
“A key uncertainty for the trajectory of OPEC+ crude supply remains the level of compliance with agreed targets, with our estimates showing collective output 680,000 b/d above targets in November,” IEA stated.
OPEC+ members have extended production cuts of 2.2 million barrels per day to March 2025 to stabilize the market. Russian Urals crude oil, which remains an essential source for Indian refiners, has maintained an average discount of $12.1 per barrel compared to dated Brent. Despite this, production may rise next year with expected increases from Libya, South Sudan, Sudan, and Kazakhstan’s Tengiz expansion.
The abrupt halt in Chinese oil demand growth and slower demand in other key emerging economies have influenced a more subdued market outlook, according to the IEA. OPEC, an intergovernmental organization of 13 major oil-producing nations including Saudi Arabia and Iran, represents about 44% of global oil production and holds 81.5% of the world’s proven oil reserves.
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