The International Energy Agency (IEA)‘s latest report on the 2024 global oil outlook paints a picture of record-breaking supply, with projections reaching 103.5 million barrels per day (mb/d).
This surge is attributed to substantial US, Brazil, Guyana and Canada output increases.
Geopolitical tensions, particularly in the Middle East, have stirred concerns about potential disruptions to global oil supply routes.
Recent US and UK airstrikes in response to Red Sea tanker attacks by the Iran-backed Houthi group have heightened these concerns.
Although oil and liquefied natural gas production remain resilient, many ship owners are diverting cargoes away from the Red Sea.
Global oil inventories experienced an 8.4 mb decline in November, reaching their lowest point since July 2022.
However, preliminary data suggests a reversal of this trend in December, driven by a surge in oil on water.
According to the IEA, non-OPEC+ production increases are expected to outpace demand growth, leading to a potential surplus.
However, analysts note that the market remains sensitive to factors like the gradual unwinding of OPEC+ group’s voluntary cuts in the second quarter of the year.
