IEA Cuts 2026 Oil Supply Forecast by 5.7 Million BPD Amid Gulf Production Woes

The International Energy Agency (IEA) has revised its global oil supply forecast downward, predicting a 5.7 million barrels per day (bpd) decline in 2026.

This represents a 6% decrease from the agency's previous estimate and is largely due to the delayed recovery of Middle Eastern production.

The IEA now expects normal Gulf flows to return in 2027, rather than this year as previously thought. Saudi Arabia accounted for a significant portion of the decline, with crude supply plummeting 2.3 million bpd in August to just 6 million bpd, its lowest level in over three decades.

The shortage is already affecting demand, with the IEA now forecasting a 2.5 million bpd contraction in global oil consumption this year, up from its previous estimate of 1.6 million bpd. Record fuel prices are forcing consumers to use less, particularly as refinery disruptions tighten diesel and other product markets.