Commodities
IEA Cuts Global Oil Supply Forecast Amid Escalating Middle East Conflict
The International Energy Agency (IEA) has revised its forecast for global oil supply downwards due to ongoing tensions in the Middle East. The agency now expects a decline of 4.3 million barrels per day (bpd) in 2026, up from its previous estimate of a 3.7 million bpd decline. This represents a 4% reduction in global oil supply and would leave it approximately 1.27 million bpd below demand.
The IEA attributes the revised forecast to the continued conflict in the Strait of Hormuz and Bab al-Mandeb, which has made it difficult to transport oil through these strategic waterways.
As a result, the global oil market is expected to face a deficit of 1.8 million bpd between July and September, marking the largest quarterly shortfall since 2021.