Global Oil Supply Plunges Amid Iran War Chaos
The International Energy Agency (IEA) has warned that global oil supply will not meet total demand this year due to the ongoing Iran war, which has caused significant damage to Middle East oil infrastructure and disrupted tanker traffic through the Strait of Hormuz.
Cumulative supply losses from Gulf producers already exceed 1 billion barrels, with over 14 million barrels per day shut in. The IEA forecasts a market deficit of 6 million barrels per day in the second quarter of this year, even if the conflict ends soon.
The agency estimates that global oil supply will fall by around 3.9 million barrels per day across 2026 due to the war, and demand is also under pressure due to price spikes leading to demand destruction and slower economic growth.