Escalation of attacks threatens to derail recovery in Middle East oil exports
World oil demand is forecast to fall by 2.5 mb/d y-o-y in 4Q26 and 2.6 mb/d on average in 2026. As the Iran war manifests itself through restricted product availability, soaring fuel prices and a deteriorating economic outlook, diesel will register 25% of the drop. A partial recovery, of 2 mb/d, will leave 2027 global ...
The ongoing escalation of attacks in the Middle East threatens to hinder the recovery of oil exports, with global demand projected to fall by 0.6% in 2027 compared to 2025 levels. The conflict has caused restricted product availability, soaring fuel prices, and deteriorating economic conditions, with diesel registering a 25% drop in global exports.
OPEC+ gains, led by Saudi Arabia, helped increase oil supply by 2.1 mb/d, while non-OPEC+ gains were driven by the UAE. However, renewed attacks in the Gulf have left the recovery fragile, with global refinery runs hitting a seasonal low in October. Record freight and crude costs have crushed margins in Europe and Asia, while discounted feedstocks have boosted US margins.
Global oil supply is projected to decline by 5.8 mb/d this year, before reversing course in 2027. Global diesel exports dropped by 1.3 mb/d in September due to supply disruptions, partly offset by higher supply from other sources. Global observed oil inventories decreased by 10 mb in September, with non-OECD crude stocks slumping by 76 mb.
North Sea Dated crude increased by $26.17/bbl in September as Middle East hostilities disrupted supplies and Asian refiners accelerated purchases. Global refined product and LPG shipments from the Middle East remain below pre-war levels, with crude oil exports from Gulf producers reaching over 75% of pre-war levels in September. However, recent attacks are threatening further gains in Middle East oil supply.
Written by urgent.news from Hellenic Shipping News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
