IEA Forecasts Record Oil Supply Decline as Middle East Conflicts Persist

The International Energy Agency (IEA) has revised its forecast for global oil supplies in 2026, predicting a decline of 5.7 million barrels per day, or about 6%. This is a significant increase from their previous estimate of a 4% decline.

The IEA attributes the revision to the ongoing conflict in Iran and the lack of progress towards resolving it, which has delayed the restoration of normal oil flows from the Middle East until 2027. As a result, global oil inventories are declining at record rates, with a fall of 3.1 million barrels per day in August.

The agency's monthly report also highlights that the global refining system is operating at its limit and reserves are dwindling. The IEA calls for an end to the conflict in the Middle East and the ongoing war between Russia and Ukraine, which has been going on for five years.