IEA Anticipating Non-OPEC Production Gains

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Oil producers outside of the Organization of the Petroleum Exporting Countries (OPEC) are expected to account for the bulk of growth next year, the International Energy Agency (IEA) (Paris, France) said.

The IEA reported in its regular monthly report for September, published Friday, that global oil supply set a record last month at 106.9 million barrels per day (BBL/d). This followed a decision from OPEC+, which includes the core members of OPEC and non-member state allies, to unwind voluntary production curtailments starting next month.

Total production growth this year is expected to increase by 2.7 million BBL/d to reach an average of 105.8 million BBL/d. By 2026, output grows by 2.1 million BBL/d to reach 107.9 million BBL/d. Non-OPEC suppliers are expected to account for about 65% of that growth this year, though that falls to around 50% by next year.

Much of the anticipated growth comes from the United States, Brazil, Canada, Guyana and Argentina, with the IEA finding output at or near all-time highs. Brazil stands out for its offshore basins, where BP (London, England) this year made its largest discovery in 25 years. Argentina holds vast oil and gas deposits in the Vaca Muerta shale basin, while Guyana is an emerging oil giant with prospects in the Stabroek block offshore.

Canada, for its part, holds some of the largest heavy-oil deposits in the world, largely situated in Alberta. The nation is the top crude oil exporter to the United States because many U.S. refiners prefer heavier crude, but is looking to expand its options outside North America due to declining bilateral relations.

The U.S., meanwhile, is the largest oil producer in the world, with shale basins accounting for the bulk of the output. Many global oil producers, however, are dependent on the broader markets to determine direction. Both OPEC and the U.S. Energy Information Administration (EIA), part of the U.S. Department of Energy, said a lower-for-longer outlook for crude oil prices is expected to curtail production in the coming years.

"Prices moved in a narrow band since August and at the time of writing Brent was $67 per barrel largely unchanged from a month earlier," the IEA found. "However, the prospect of looming oversupply dampened any positive price impetus, as investor sentiment towards oil remained strongly bearish."

Inventories are steady, meanwhile, despite emerging signs of a glut. The IEA said global storage levels increased by 26.5 million barrels in July, bringing gains over the seven-month period to 187 million barrels. Global stocks, however, remain below the five-year average, despite recent stockpiling in China.

"Global stocks are forecast to rise by an untenable 2.5 million BBL/d on average in 2H25 as supply far outstrips demand, but there are a number of potential twists and turns ahead--including geopolitical tensions, trade policies and additional sanctions on Russia and Iran -- that could yet alter market balances," the IEA stated.

Geopolitical risk moved higher when Israeli forces last week targeted a Hamas official in Qatar, a staunch U.S. ally. Trade policies from U.S. President Donald Trump have undermined global growth, though OPEC economists said last week that much of that tension is easing.

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