Middle East Conflict Drives Global Oil Supply Down by 1.6 Million Barrels
Global oil supply has declined sharply due to the ongoing US-Iran conflict, pushing prices higher. According to the International Energy Agency (IEA), global oil output fell by 1.6 million barrels per day in August to 100.1 million barrels per day. The agency reports that more than 10 million barrels per day of Gulf production remains shut due to heightened security risks.
The supply losses have led to a significant increase in oil prices, with North Sea Dated crude averaging $91 per barrel in August, up $7.61 from July. On September 9, the price surged to $113.48 per barrel. The IEA has cut its outlook for global oil supply, projecting production to average 100.7 million barrels per day in 2026, a decline of 5.7 million barrels per day from last year.
The agency also states that the expected recovery in Gulf production has been pushed into 2027, when global output is projected to rebound by 8 million barrels per day. The tightening supply has resulted in severe losses for refined petroleum products, with diesel prices rising faster than crude.