IEA Cuts Oil Supply Forecast Amid Ongoing Middle East Hostilities

The International Energy Agency (IEA) has cut its forecast for global oil supply in 2026, citing ongoing hostilities in the Middle East as a major reason. According to the IEA's monthly oil market report, supply will drop by 4.3 million barrels per day this year, down from a previous estimate of 3.7 million bpd.

This represents a 4% reduction in global oil supply and takes total supply to its lowest forecast yet for this year at 102.02 million bpd. The IEA expects the current supply deficit to widen further, with demand set to outstrip supply by 1.27 million barrels per day this year.

The agency points to renewed hostilities in the Middle East as a major factor behind the reduced oil supply forecast. The US-Iran ceasefire broke down last month, and tanker attacks in the Strait of Hormuz have resumed, causing a significant reduction in oil exports from the region.