IEA Warns Oil Supply Crisis Will Worsen as Gulf Flows Remain Delayed

The International Energy Agency (IEA) has warned that global oil supply will decline by 5.7 million barrels per day (bpd) in 2026, a 6% drop from previous estimates. This sharp decrease is due to the ongoing conflict in the Middle East and the delayed return of normal Gulf oil flows, which were expected to resume in 2027 but are now pushed back.

The IEA's latest report highlights that global inventories have been depleted at a record pace, with stocks falling by 3.1 million bpd in August. This has led to a surge in fuel prices, with crude oil reaching $110 a barrel for the first time since May and refined products hitting record highs.

The agency also noted that Saudi Arabian crude supply fell by 2.3 million bpd to 6 million bpd in August, the lowest level in over three decades due to attacks on facilities and shipping routes.