IEA Slashes Oil Supply Forecast Amid Ongoing Middle East Conflicts

The International Energy Agency (IEA) has slashed its forecast for global oil supply in 2026, citing ongoing hostilities in the Middle East and a decline in tanker traffic through the Strait of Hormuz. The IEA expects global oil supply to fall by 4.3 million barrels per day this year, down from 102.02 million bpd.

This would put global oil supply around 1.27 million barrels per day below demand, widening a deficit that was already forecasted in the IEA's July report. The agency attributes the decline to a combination of factors, including renewed hostilities in the Middle East, attacks on tankers in the Strait of Hormuz, and reduced Kazakh CPC Blend exports.

The IEA also notes that Middle East oil loadings dropped from 20 million bpd at the start of July to 12 million bpd later in the month. This has resulted in a significant reduction in production, with Middle East output now 8.3 million bpd below pre-war levels.