Market Speak: IEA sees oil demand recovery despite global slowdown

The International Energy Agency reported that global oil demand rebounded by 750,000 barrels per day year-on-year in the third quarter of 2025, recovering from the tariff-hit second quarter when growth slowed to 420,000 bpd. The IEA expects annual demand gains of around 700,000 bpd in both 2025 and 2026, as petrochemicals regain their lead in consumption growth. However, subdued economic activity, higher vehicle efficiency, and rising EV sales continue to weigh on road fuel demand. Meanwhile, rapid supply increases have created a global surplus of about 1.9 million bpd since the start of the year, though crude prices have stayed near $70 a barrel. The IEA warned that as large volumes of crude on water move into major hubs, inventories could surge further. Still, tightness in product markets may persist due to lost Russian supplies, upcoming EU import restrictions, and recent refinery closures.

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