Global oil supply to exceed global oil demand in 2025

International Energy Agency (IEA) has said that global oil supply is likely to exceed global oil demand, in 2025. The IEA estimates that global oil supply in 2025 will be at 1.5 million barrels per day. Global oil demand in the year will be at around 1.3 million barrels per day. So daily supply is expected to exceed daily demand by 200,000 barrels per day, this year.

Oil prices continue to rise

In spite of these projections by IEA yesterday, price of oil continued to rise today. At 10:55 a.m. Indian standard time, 18^th June, 2025, WTI crude for July delivery was trading at $74.78 per barrel. Brent crude for July delivery was trading at $76.28 per barrel.  Since Monday, oil prices have increased by around 7%.

This continued rise is because of the ongoing conflict between Iran and Israel. President Trump leaving the G-7 summit early because of the ongoing war between Israel and Iran, gave signal to the market that the war may be exacerbating. President Trump then asked Iran to surrender unconditionally. He added that America knew the location of Iran’s Supreme Leader, Ali Khamenei.

The risk of disruption in Strait of Hormuz

Iran’s strategic location next to Strait of Hormuz gives it the capability to block or disrupt movement of ships and oil tankers through the strait. Much of the oil from Saudi Arabia, Kuwait and Iraq is shipped through this strait. If the war escalates further, then Iran may use this option and start trying to block the movement of ships through the strait.

Any further hike in oil prices will hurt India. India relies on imports for meeting around 90% of its oil needs.

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Source: International Energy Agency (IEA)