Oil Set to Snap Three-Week Losing Streak Amid Rising Fuel Demand

The global oil market is poised to snap a three-week losing streak as rising fuel demand and geopolitical tensions drive prices higher. According to the International Energy Agency (IEA), global oil demand growth is projected to average 1.1 million barrels per day (mb/d) in 2025, up from 870,000 barrels per day (kb/d) in 2024. This increase is driven by China, India, and other emerging Asian economies, as well as a rebound in OECD demand following a modest increase last year.

The IEA also reports that world oil supply plunged 950 kb/d to 102.7 mb/d in January, as seasonally colder weather hit North American supply, compounding output declines in Nigeria and Libya. However, supply was still 1.9 mb/d higher than the same period last year, driven mainly by increases in the Americas. Forecasts suggest that global oil supply is set to rise by 1.6 mb/d to reach 104.5 mb/d in 2025, with the majority of this growth coming from non-OPEC+ producers, assuming OPEC+ continues its voluntary cuts.

Geopolitical tensions, such as the new US sanctions on Russia and Iran, have roiled markets but have yet to materially impact global oil supply. Iranian crude oil exports are only marginally lower, while Russian flows continue largely unaffected. At the same time, non-OPEC+ oil supplies, led by the Americas, are set to expand by 1.4 mb/d this year – well above projected demand growth. However, improved OPEC+ compliance with agreed targets is slowly chipping away at this year’s projected supply surplus. The producer alliance confirmed on February 3, 2025, that they plan to start unwinding voluntary cuts from April, noting that these additional voluntary production adjustments have ensured the stability of the oil market.



In conclusion, the global oil market is set to snap a three-week losing streak as rising fuel demand and geopolitical tensions drive prices higher. The IEA projects global oil demand growth to average 1.1 mb/d in 2025, with China, India, and other emerging Asian economies leading the way. Meanwhile, global oil supply is expected to rise by 1.6 mb/d in 2025, with non-OPEC+ producers accounting for the bulk of the increase. As OPEC+ begins to unwind its voluntary cuts, the market will closely monitor the impact on supply and demand dynamics, as well as geopolitical risks, to assess the sustainability of this trend in the long term.