Dubai: Global oil demand experienced a rebound in the third quarter of 2025, with growth increasing to 750,000 barrels per day (kb/d) year-on-year from the second quarter’s pace of 420 kb/d. This rise comes after a period of reduced consumption due to tariff issues, particularly affecting LPG and ethane feedstocks, which saw an unusual contraction, according to the IEA Oil Market Report (OMR) for October. Despite this uptick, oil use is expected to remain subdued for the remainder of 2025 and into 2026, with annual demand gains projected at approximately 700 kb/d for both years.
According to Emirates News Agency, the third-quarter growth aligns with the annual forecast of around 700 kb/d for 2025 and 2026. Although recent growth has been sluggish, the petrochemical sector is anticipated to drive future oil demand, as economic challenges, increased vehicle efficiency, and strong electric vehicle sales continue to impact road transport fuel demand.
In September, global oil supply increased by 760 kb/d month-on-month, reaching 108 million barrels per day (mb/d), driven by a 1 mb/d surge in OPEC+ production, particularly from the Middle East. World oil supply is expected to grow by 3 mb/d in 2025 to 106.1 mb/d and by 2.4 mb/d in 2026. Non-OPEC+ countries, including the US, Brazil, Canada, Guyana, and Argentina, are projected to contribute 1.6 mb/d in 2025 and 1.2 mb/d in 2026. Meanwhile, OPEC+ is forecast to add 1.4 mb/d in 2025 and 1.2 mb/d in 2026 under the current production agreement.
Refinery operations are anticipated to rise by 600 kb/d in 2025 and 460 kb/d in 2026, reaching 83.5 mb/d and 84 mb/d, respectively. Refining margins improved in September, driven by enhanced diesel and jet fuel cracks following disruptions in Russian refining and exports.
Global observed oil inventories increased by 17.7 million barrels in August, reaching a four-year high of 7,909 million barrels. This rise was mainly due to a 36.2 million barrel increase in product stocks, partially offset by an 18.5 million barrel decrease in global crude, natural gas liquids, and feedstocks. OECD inventories rose by 22 million barrels, while non-OECD inventories increased by 4 million barrels, supported by growing Chinese crude stocks. Preliminary data for September indicates a significant rise in oil stocks, highlighted by a 102 million barrel increase in oil on water.