Oil Daily | IEA Cuts Global Oil Supply Forecast as U.S. Production and Venezuela Output Decline

【Global Oil Supply and Demand】

In Europe, carbon emissions from power generators soared to 390 million metric tons in the first quarter of 2025 due to increased reliance on natural gas and coal, driven by lower wind and solar outputs. Germany, the Netherlands, the UK, and Poland were significant contributors, with colder weather exacerbating renewable shortfalls. However, solar and wind power are expected to rebound in the coming months.

China's thermal power generation fell by 4.7% in the first quarter, offset by a 9.5% rise in hydropower. Despite a slight dip in total electricity demand early in the year, it grew by 1.8% in March. Coal remains integral to China's power supply amid ongoing electrification, though coal imports fell by 0.9% due to increased domestic supply.

The International Energy Agency (IEA) forecasts a 1.2 million barrels per day increase in global oil supply for this year, down 260,000 barrels per day from earlier predictions. U.S. oil production is revised downward due to new tariffs impacting drilling costs, while Venezuela faces reduced output from tightened U.S. sanctions.

【Oil-Producing Countries Dynamics】

Amid ongoing tariff negotiations, Indonesia plans to purchase an additional $10 billion worth of U.S. oil and liquefied petroleum gas to reduce its trade surplus with the U.S. Similarly, Pakistan is contemplating importing U.S. crude oil to mitigate trade tariffs imposed by the U.S., seeking to balance its trade relations.

【Latest Oil Policies】

President Trump has directed the Department of Commerce to assess tariffs on critical minerals, a move targeting Chinese dominance in the sector. This push for domestic supply chains faces environmental resistance but aims to secure economic and national security benefits.

The European Union is exploring options to circumvent Hungary's veto power on Russian sanctions by reclassifying them as trade measures, which require a qualified majority. This strategy would maintain pressure on Russia despite Hungary's ties with Moscow.

【Industry News】

HSBC has revised its oil price forecasts downward due to tariff impacts and OPEC's output adjustments. The bank's reduced demand growth expectations reflect broader economic uncertainties, positioning its outlook among other cautious Wall Street predictions.

【Others】

The U.S. crude oil inventories increased by 2.4 million barrels, contrary to expectations of a decline. This rise, alongside strategic petroleum reserves and shifting gasoline and distillate inventories, highlights ongoing adjustments in domestic energy storage and consumption patterns.