IEA Downgrades Oil Forecasts as Middle East Conflict Takes Toll

The International Energy Agency (IEA) has downgraded its global oil supply and demand forecasts for this year due to the ongoing Middle East conflict. According to Reuters and Bloomberg, the IEA's report states that the average daily oil supply is projected to be 100.7 million barrels, a decrease of 5.7 million barrels compared to last year.

This drop is larger than previously predicted, at 4.3 million-barrel reduction in last month's report. The oil demand forecast was also lowered by an average of 900,000 barrels per day, with demand expected to drop by 2.5 million barrels compared to last year.

Saudi Arabia's crude oil supply in August dropped by a staggering 2.3 million barrels from the previous month to average 6 million barrels per day, falling to its lowest level in over 30 years.

The IEA emphasized that 'Inventories have played a critical role in market balance so far,' adding that 'With buffers shrinking and the global refining system pushed to its limits, progress in resolving the conflicts in the Middle East and between Russia and Ukraine is necessary to prevent further market pressure and demand destruction.'