International crude oil prices have been falling under the weight of over supply but it could be worse next year with dire consequences for oil dependent countries like Nigeria.

Data from the International Energy Agency, (IEA), showed that global oil markets are on the way to a record surplus next year as demand slows and supplies increase.

Oil inventories will accumulate at a rate of 2.96 million barrels a day, surpassing even the average buildup during the pandemic year of 2020, data from the IEA’s monthly report showed. World oil demands this year and next is growing at less than half the pace seen in 2023.

At the same time, supplies are booming. The OPEC+ coalition, led by Saudi Arabia, has fast-tracked the restart of halted production, and the IEA has slightly bolstered forecasts for output outside the group in 2026, led by the Americas.

“Oil-market balances look ever more bloated as forecast supply far eclipses demand towards year-end and in 2026,” the Paris-based agency said. “It is clear that something will have to give for the market to balance,” it added.

Crude prices have declined roughly 12% this year, trading near $66 a barrel in London, as increasing supplies from both OPEC+ and its rivals coincide with deepening concern that US President Donald Trump’s trade war will impact economic growth.

The price retreat offers some relief for consumers after years of inflation, and a win for Trump as he pushes for lower fuel costs, but poses a financial threat for oil-producing companies and countries.

Oil markets are drawing some support for the time being from strong summer demand for driving fuels, but the IEA’s data suggest they’re already tipping into oversupply. World oil inventories reached a 46-month high in June. New sanctions on Russia or Iran could still change the picture, the agency added.