The latest global oil market report from the International Energy Agency (IEA) shows that the balance of the global oil market is gradually being broken. On the one hand, global oil supply is steadily increasing, while on the other hand, the growth rate of global oil demand has fallen below the historical average. At the same time, the recent trade turmoil caused by the US tariff hike and the economic impact of the US federal government shutdown are superimposed, and the impact of the new round of sanctions imposed by the US and the West on Russia is still unclear, making the market outlook full of risks. The price of Brent crude oil in the UK fell by $3.26 per barrel in October, down for four consecutive months, with an average monthly quotation of $64.64 per barrel, and the trading price fluctuated around the $62 per barrel range.

The report shows that the global oil supply has been affected by the production cuts of the "OPEC+" group, which consists of OPEC member countries and non-OPEC oil producers, and the continuous rise in oil supply has been suspended, decreasing by 440,000 barrels per day (bpd) to 108.2 million bpd in October. A series of routine oilfield maintenance operations and unexpected production cuts in various countries have limited capacity. Nevertheless, the total global oil production has still increased by 6.2 million bpd compared to January this year, with half of the increase contributed by non-OPEC+ and OPEC+ producers respectively. It is expected that the global oil supply will grow by 31.0 million bpd in 2025, reaching an average of 106.3 million bpd, and will increase by another 25.0 million bpd to 108.7 million bpd in 2026, with non-OPEC+ producers contributing 17.0 million bpd in 2025 and 12.0 million bpd in 2026. Saudi Arabia has increased its oil production by nearly 15.0 million bpd from January to October this year, basically consistent with its adjusted production quota. In contrast, Russia's production only increased by 1.2 million bpd during the same period, and the sanctions imposed by the US and the West on Russia's energy exports, coupled with the deteriorating operating environment, have limited Russia's oil production growth.

The report notes that the Russian oil industry will face greater pressure following sanctions imposed by the United States and the United Kingdom on the country's two major oil producers, Rosneft and Lukoil. The two companies account for about 50 percent of Russia's crude oil production and exports. The new round of sanctions will take effect on November 21, and although Russia's oil exports are not currently significantly affected, international buyers have begun to reassess risks and seek alternative channels or workarounds.

The report also shows that the “ocean oil reserve” continues to accumulate. After a surge of 80 million barrels of crude oil reserves in September, preliminary data in October showed that the crude oil reserves in ocean tankers have accumulated again by 92 million barrels. Currently, nearly 200 million barrels of crude oil are stranded at sea, about 32% of which are sanctioned crude oil. In contrast, the land-based reserves of other major oil-consuming countries are still at low levels, with the Organization for Economic Co-operation and Development (OECD) reserves increasing by a modest 5 million barrels and non-OECD reserves decreasing by 7 million barrels. The supply of products such as diesel and jet fuel is tight, and there is limited room for short-term relief.

Although the demand for petrochemical feedstocks has not met expectations since the beginning of the year, it is still the main pillar of global oil demand growth. At the beginning of November, a series of planned and unexpected production cuts, routine equipment maintenance, and ongoing downstream capacity constraints in Russia have pushed refining margins in Europe and Asia to two-year highs. Global refining throughput fell sharply by 2.9 million barrels per day in October compared to the previous month, to 81.5 million barrels per day, but it is expected to recover by the end of the year. It is expected that global refining throughput will increase to 83.6 million barrels per day in 2025; and then increase by another 5.1 million barrels per day in 2026, reaching 84.1 million barrels per day.

Global oil demand growth for the third quarter of 2025 has been revised up by 170,000 b/d to 9.2 million b/d year-on-year increase, as a result of a strong recovery in actual oil deliveries in China, the report said. Global oil demand is expected to grow by 790,000 b/d year-on-year in 2025, with the US, China and Nigeria each contributing about 1.2 million b/d of incremental demand. The growth rate of global demand is expected to remain around 7.7 million b/d in 2026. The report预计 that the growth rate of global oil consumption in the fourth quarter of 2025 will slow down compared to the third quarter, while crude oil supplies will further rebound, exacerbating the already oversupplied market situation.

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