The recent report by the International Energy Agency (IEA) confirms an increase in world oil demand for 2026, which will reach 930 thousand barrels per day (kb/d). This upturn represents a sustained economic recovery and lower prices than those recorded a year ago. As in previous periods, non-OECD countries will absorb all of this growth.
Non-OPEC+ oil demand
On the other hand, the supply picture is nuanced. In December 2025, world production fell to 107.4 million barrels per day (mb/d), dragged down by declines in Kazakhstan and the Middle East, while Russia showed a notable rebound.
Despite this one-off decline, the projection for 2026 indicates a rise to 108.7 mb/d. Most of the growth will come from non-OPEC+ producers, particularly the American bloc led by the United States and Brazil.
Saudi Arabia and Russia lead OPEC+ production
Within the OPEC+ group, total production reached 43.29 mb/d in December 2025, with sustainable capacity of up to 48 mb/d. This leaves an available production margin of 4.56 mb/d.
Saudi Arabia remains the leading producer, with 9.7 mb/d and an effective cushion of 2.41 mb/d. Russia produced 9.56 mb/d, while Iraq and the UAE reached 4.34 and 3.64 mb/d respectively. Venezuela held production steady at 0.99 mb/d, while Kazakhstan reduced its output to 1.5 mb/d.
Refining and prices under seasonal pressure
Refining activity is also adjusting to the new context. Global refineries reached production of 85.7 mb/d in December, although a slight seasonal drop is anticipated during the first quarter of 2026. Profit margins, especially in Europe, have weakened due to falling distillate prices.
In terms of inventories, the market is in ample surplus. Observed global stockpiles increased by 470 million barrels during 2025. This surplus has been driven by Chinese imports, higher offshore storage and an increase in U.S. gas liquids stocks. A daily increase of 2.5 mb was recorded in November, and preliminary data for December point to an additional build-up.
Geopolitical factors affect but do not alter the balance sheet
Crude oil prices, meanwhile, have been sensitive to external factors. Geopolitical tension surrounding Iran and Venezuelapushed the price of Brent up to 66 dollars per barrel at the beginning of January. However, the reduction in exports from these countries has been partially offset by the Russian recovery, which reached its highest production in almost three years.
Meanwhile, attacks on infrastructures in the Black Sea Black Sea and the Caspian limited the flow from Kazakhstan. However, the buildup of global inventories has acted as a buffer zone, stabilizing prices and reducing immediate pressure on supply.
Abundance with caution
Overall, the oil oil market is heading towards a year of positive balances, where the abundance of supply and high reserves will allow us to absorb eventual disruptions.
The evolution of the conflict in key regions and the OPEC+ production strategy will be decisive for price behavior in the coming months.
Source and photo: IEA