Irina Slav
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.
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By Irina Slav – Mar 23, 2025, 6:00 PM CDT
- A significant increase in global oil supply is projected for 2025, potentially reaching the highest level in ten years, but this hinges on oil prices remaining at levels that justify production.
- There is considerable uncertainty surrounding oil demand, particularly from China, with conflicting reports and varying projections of supply overhang from different agencies like the EIA, Raymond James, and the IEA.
- Despite the potential surplus, there is a push for continued investment in oil and gas fields to ensure global energy security, even as concerns about demand and the energy transition persist.
This year will see the highest amount of new oil supply in a decade, according to data analyzed by Raymond James that showed projected global additions of nearly 3 million barrels daily.
But only if the price is right.
Bloomberg reported the Raymond James figures, noting projects such as the giant Tengiz field in the Kazakh section of the Caspian Sea—one of the largest oil discoveries in modern times—and the Bacalhau field in Brazil, which has an estimated potential of 1 billion barrels of oil equivalent. Production expansions at Saudi fields will also contribute to the fresh wave of oil supply, the investment bank added.
“Investors have not fully grasped just how much new supply from projects is on deck in 2025,” Raymond James analyst Pavel Molchanov told Bloomberg. The thing is, this supply may get delayed if prices remain as depressed as virtually everyone expects them to remain this year due to the perceived imbalance between supply and demand, and indications of weak demand growth prospects.
Reuters’ Clyde Russell addressed the demand dynamics in a column this week where he argued that projections about China’s oil demand growth today did not match import figures. The demand projections were quite bullish, he noted, while import figures suggested a weakening. It does, however, bear noting that China was importing crude at record-smashing rates after the end of its pandemic lockdowns. What we are currently witnessing may in fact be a normalization of demand patterns.
Whatever the dynamics of Chinese oil imports is a sign of, forecasts for the balance between global supply and demand are all in favor of supply overhang. The only difference seems to be the size of it. According to the latest from the U.S. Energy Information Administration, the overhang is going to be around 100,000 barrels daily. According to Raymond James, the overhang is going to be some 280,000 bpd. The most bearish projection comes from the International Energy Agency, which expects a supply overhang of 600,000 barrels daily this year. That new supply might not make it to market in 2025.