Oil Market Faces Largest Quarterly Deficit Since 2021

The global oil market is facing a significant supply deficit due to disruptions in Middle East production and shipping. The International Energy Agency (IEA) forecasts that the deficit will be 1.8 million barrels per day during the third quarter, with global supply averaging 102.02 million barrels per day this year.

The IEA's revised outlook is based on a decline of 4.3 million barrels per day in production in 2026, down from its previous forecast of 3.7 million barrels per day in July. The agency attributes the deficit to continued disruptions to Middle East oil flows, including the closure of the Strait of Hormuz and attacks around the Bab el-Mandeb Strait.

Canadian Natural Resources, Canada's largest oil producer, has announced that several potential oil sands expansions will remain on hold until agreements with the federal and Alberta governments are finalized. The company's CEO, Scott Stauth, stated that the projects would not proceed until provisions in a memorandum of understanding involving Ottawa, Alberta, and major oil sands producers are translated into final legislation or agreements.