Global Oil Demand Surges as Production Struggles to Keep Up

Global oil demand experienced a significant increase in June, rising by more than 1 million barrels per day (bpd) compared to May, according to the latest data from the Joint Organizations Data Initiative (JODI). In contrast, production growth was considerably lower, reaching only half that figure. As a result, crude oil inventories fell below the five-year averages, indicating a tightening market.

The data released on Wednesday by the Riyadh-based International Energy Forum (IEF) revealed that oil demand across the 48 JODI-reporting countries surged by 1.23 million bpd month-on-month in June. Year-on-year, this represented an increase of 638,100 bpd. A significant contributor to this monthly surge was the United States, which recorded an increase of 1.28 million bpd compared to May. Other countries, including Canada, Italy, the United Kingdom, and South Korea, also reported smaller but notable demand increases.

Saudi Arabia, the world’s leading crude exporter, played a central role in the production landscape. In June, the country boosted its output in line with its commitments under the OPEC+ oil supply agreement. Overall, global crude oil production from JODI-reporting countries rose by 524,000 bpd in June compared to May, and by 1.45 million bpd year-on-year. Saudi Arabia accounted for the largest share of this annual growth, increasing its production by 922,000 bpd in June 2025 compared to June 2024. Nigeria and the United States followed, with increases of 234,000 bpd and 186,000 bpd, respectively.

As demand surged and production growth lagged, crude inventories in JODI-reporting countries declined by 1.14 million barrels from May, settling at 166 million barrels below the five-year average. Although product inventories rose by 6.8 million barrels month-on-month, they remained 57.6 million barrels below the five-year average in June.

The tightening market comes at a pivotal time, with the summer season typically seeing increased travel and energy consumption. Industry analysts predict that while the current summer market is tight, it may soon shift towards a surplus later this year and into early 2026. This anticipated shift is due to planned production cuts of 2.2 million bpd set to take effect by the end of September, after the peak summer travel season concludes.

The JODI data highlights the dynamic nature of the global oil market, showcasing the balance between rising demand and slower production growth. As countries navigate these fluctuations, the outlook on supply and demand will remain a critical factor for stakeholders in the energy sector.