For the first time since the war began, the world may be making more oil than it uses. Oil supply will average 105 million barrels per day in the fourth quarter, 1.7 million bpd higher than forecast demand. The IEA had previously forecast a fourth-quarter supply deficit. Gulf producers are finding ways around the blockade, including so-called dark crossings through the Strait of Hormuz, where tankers switch off tracking signals to evade attack. Demand is giving way too: world oil demand is forecast to fall by 2.7 million bpd in 2026 to 102.3 million bpd. The problem is now specific fuels, not crude in general: diesel prices remain 77% above pre-war levels.
The IEA now expects the oil market to return to surplus this quarter, reversing its earlier forecast of a deficit. Gulf exports are recovering faster than demand, even as attacks on shipping continue. But some fuels, diesel especially, are still very expensive.
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IEA Oil Market Outlook — Key Takeaways
Indicator
Latest figures / Developments
Significance
Q4 Supply Surplus
Supply: 105 million bpd, exceeding forecast demand by 1.7 million bpd
IEA reverses its earlier forecast of a Q4 deficit
Gulf Oil Exports
Exports recovering through workarounds, including “dark crossings” through the Strait of Hormuz
Tankers switch off tracking signals to reduce exposure to attacks
2026 Global Demand
Demand projected to fall 2.7 million bpd to 102.3 million bpd
High oil prices are suppressing consumption
2027 Supply Outlook
Supply projected to increase 6.6 million bpd to 108.1 million bpd
Points to substantial supply growth
Diesel Prices
77% above pre-war levels
Refined-fuel costs remain elevated despite the improving oil supply outlook