IEA: Global Oil Deficit To Hit 1.8 Million Bpd This Quarter

The International Energy Agency (IEA) has reduced its forecast for global oil supply in 2026, projecting a 4.3 million barrels per day (bpd) decline as the closure of the Strait of Hormuz continues to impact production. This forecast is a significant drop from the previously anticipated 3.7 million bpd reduction, and would leave global supply at 102.02 million bpd, the lowest forecast for the year.

The supply-demand imbalance is expected to reach 1.8 million bpd this quarter, a substantial increase from the 860,000 bpd deficit forecasted in July. Middle East oil flows have temporarily returned to pre-war levels, but production remains 8.3 million bpd below pre-war levels. The Hormuz shutdown, along with U.S. sanctions on Iranian exports, attacks in the Bab el-Mandeb Strait, and reduced Kazakh exports have all contributed to the global supply deficit.

The IEA also predicts a global oil consumption contraction of 1.6 million bpd this year, driven by high prices and limited refined fuel supplies. These factors have led to a decrease in global refining capacity by 5 million bpd year-over-year, and Russian fuel exports have dropped to 1.4 million bpd, nearly half of their July 2025 levels.

The prolonged shortage is causing global stocks to decline, with the IEA estimating a 410 million barrel reduction since the beginning of the Iran war. While the IEA forecasts a potential supply-demand surplus of 4.61 million bpd in 2027, this is contingent on the de-escalation of Middle East hostilities and the recovery of disrupted oil flows.