Global oil production is growing faster than consumption

The price of a barrel of Brent blend crude oil fell last year by $14 (19 %) to around $61 a barrel. The increased production levels drove down oil prices. The International Energy Agency (IEA) estimates that production has grown by three million barrels a day while consumption has only increased by 900,000 barrels a day. The production glut reflects the contributions of producer countries that are not part of the OPEC+ group, particularly Canada and the US. Among OPEC members, Saudi Arabia raised its output, abandoning the voluntary production cuts agreed to earlier. The increase in production has caused oil inventories to swell, especially at-sea storage.

Even if the IEA expects lower prices to boost consumption growth in 2026, production growth will remain high and keep prices in check. Geopolitical tensions related to Venezuela and Iran have driven up oil prices this year, but the IEA sees the increase as transient even with persisting Iran-related uncertainty.

The US Energy Information Administration (EIA) expects the price of Brent oil to fall this year and next (figure). The US is the world’s largest consumer of oil and largest oil producer. In 2025, the US produced oil at a record level of 13.6 million barrels a day. The EIA expects lower oil prices to push US production into a slight decline in 2026–2027 as some investments cease to be profitable in the lower-price environment.