IEA sees global oil supply falling 4.3 million bpd in 2026

The International Energy Agency expects global oil supply to fall by 4.3 million barrels per day in 2026, about 4%, as renewed fighting in the Middle East disrupts exports through the Strait of Hormuz and other key routes.

The decline would leave worldwide supply at 102.02 million bpd, the IEA’s lowest forecast for the year, and roughly 1.27 million bpd below demand. The agency had projected a smaller 3.7 million bpd supply drop in July.

Middle East oil loadings briefly recovered to about 20 million bpd at the start of July before falling to 12 million bpd later in the month. Regional production remained 8.3 million bpd below pre-war levels, while attacks in the Bab el-Mandeb Strait and reduced Kazakh CPC Blend exports added to the shortfall.

For the third quarter, the IEA expects a 1.8 million bpd market deficit, the deepest quarterly gap since late 2021. Inventories have already declined by a cumulative 410 million barrels since the Iran war began.

The agency also lowered its demand outlook, forecasting global oil consumption will contract by 1.6 million bpd this year as high prices and restricted fuel supplies weigh on use. OPEC remains more optimistic, projecting demand growth of 580,000 bpd.

Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.