The world’s energy markets are entering a period of heightened uncertainty as signs of an oversupplied oil market, rising geopolitical tensions over critical minerals, and renewed debates about clean power security converge to shape the global energy outlook.
Oil Market Surplus Nears Breaking Point
The International Energy Agency (IEA) warns that the global oil market could be approaching a tipping point amid mounting signs of a sustained supply glut. According to the agency’s October Oil Market Report, global oil supply exceeded demand by an average of 1.9 million barrels per day between January and September 2025.
A surge in production from the Middle East and the Americas has pushed oil stored or transported at sea to its highest level since the COVID-19 pandemic. Meanwhile, demand is expected to remain sluggish, rising by only about 700,000 barrels per day in both 2025 and 2026.
“These trends point to an untenable surplus of nearly 4 million barrels per day in 2026 – making it increasingly clear that something in markets must give,” said Toril Bosoni, Head of the IEA’s Oil Industry and Markets Division.
Compounding matters are newly announced sanctions on major Russian oil companies, which the IEA says will add another layer of complexity to global supply patterns and price stability.
Strategic Minerals Under Strain
The IEA also cautions that risks surrounding the global supply of critical minerals—key components for clean-energy technologies and advanced manufacturing—are intensifying.
In its Global Critical Minerals Outlook 2025, the agency found that China refines 19 of 20 key strategic minerals, holding an average market share of about 70 percent. “Reliance on a small number of suppliers increases vulnerability to shocks and disruptions,” the report notes, citing potential threats from extreme weather, technical failures, and trade restrictions.
Recent export controls imposed by China on rare-earth elements and lithium-ion battery materials highlight these vulnerabilities. The IEA says such measures are turning what was once a theoretical concern into a concrete geopolitical risk. The agency has urged countries, including Canada and its G7 partners, to accelerate diversification of critical mineral supply chains and strengthen resilience against future disruptions.
Hydropower’s Forgotten Role
In a separate commentary, IEA Executive Director Fatih Birol called for renewed global attention to hydropower—what he described as “the forgotten giant of electricity.” Hydropower is the world’s third-largest source of power generation, trailing only coal and natural gas. It produces as much electricity as solar and wind combined, and 50 per cent more than nuclear power.
“As decision-makers around the world contend with how to meet renewed strong growth in electricity consumption, it is high time to give hydropower the attention it deserves,” Birol wrote.
The IEA emphasizes that hydropower’s flexibility and storage capacity—currently 30 times greater than that of batteries—make it a critical tool for maintaining grid stability and supporting economic development in emerging economies.
Financing Energy Access in Africa
In its latest report, Financing Electricity Access in Africa, the IEA estimates that roughly 600 million people on the continent still live without electricity. The agency says achieving universal access by 2035 will require US$150 billion in investment over the next decade, or about US$15 billion per year—far above the US$2.5 billion committed in 2023.
The report argues that, with coordinated government action, private-sector engagement, and development-finance support, universal electricity access in sub-Saharan Africa remains within reach.
Energy Innovation Forum Highlights Canada’s Role
Canada will take centre stage this week as Toronto hosts the 2025 Energy Innovation Forum, co-organized by the IEA and the federal government. The event, held ahead of the G7 Energy and Environment Ministers’ Meeting, aims to identify key opportunities and risks for energy technology innovation.
“For five decades, the IEA has been cooperating with international experts to inform the energy technology agenda,” the agency noted, underscoring the forum’s importance in fostering collaboration and advancing low-carbon technologies.
Global Cooperation Remains Key
The IEA’s latest flurry of analyses and diplomatic engagements—including meetings between Birol and King Felipe VI of Spain and discussions with leaders in Denmark, Mozambique, and Singapore—reflect a broader effort to strengthen international coordination on energy policy.
As markets grapple with oversupply in oil, tightening controls on minerals, and uneven progress on clean-energy access, the agency warns that sustained cooperation and investment will be crucial to maintaining global energy security and supporting the world’s transition to a sustainable future.
