IEA Warns of Widening Oil Supply Gap as Crude Prices Soar

The International Energy Agency (IEA) has warned of a widening oil supply gap by 2026 due to delayed normal Gulf flows. According to the IEA, global oil supply and demand will fall further than previously thought this year, with an increase in attacks on oil tankers in Middle East shipping routes sending crude prices towards $110 a barrel.

The IEA expects world oil supply in 2026 to decline by 5.7 million barrels per day, or about 6%, up from a drop of around 4% seen previously. This is largely due to the lack of progress in ending the Iran war, which delays the return of normal Middle East flows into 2027.

The surging price of fuels such as diesel has hit record highs, with global stocks falling by 3.1 million bpd in August. The IEA stressed the need for progress in resolving conflicts in the Middle East and Russia-Ukraine war to avoid further market tightening.