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Despite the attacks in the Gulf, the recovery in exports allows production to exceed demand for the first time since February.
Global oil supply is expected to exceed demand in the last quarter of 2026 for the first time since the outbreak of the war in Iran in late February, the International Energy Agency (IEA) said on Friday.
“Our supply and demand balances for November indicate that the global oil market will return to a surplus in the fourth quarter of 2026, with a larger increase in 2027,” the IEA writes in its monthly report.
Global oil supply increased by another 2.3 million barrels per day to reach 105.4 mb/d in October, “driven by high levels of Gulf exports despite continued attacks on energy infrastructure and oil tankers,” the agency explains.
Exports from Gulf countries, excluding Oman, are now 26% lower than their pre-war level.
“Tentative signs of rebalancing”
As a consequence of this improvement in Gulf exports, the IEA has raised its global oil supply forecast for the rest of the year by 3.3 mb/d.
“The oil market is showing still tentative signs of rebalancing, with global supply exceeding demand for the first time since the outbreak of the war in Iran,” the agency writes.
As for global oil demand, it is expected to decrease by 2.7 mb/d in 2026, to 102.3 mb/d, before rebounding by 2 mb/d in 2027.
Decrease in overall demand
In the fourth quarter alone, the year-on-year decline is expected to be reduced to 2.7 mb/d in the fourth quarter of 2026, whereas this contraction averaged 4.4 mb/d over the second and third quarters of 2026.
“Global oil demand continues to be hampered by persistent disruptions to exports of refined products and LPG from the Gulf, which remain at about half their pre-war level, as well as by high fuel prices,” the agency points out.
Regarding global oil stocks, “they rebounded by 52 mb (+1.7 mb/d) in October, registering their first increase since June.”
