World oil market is returning to surplus as Gulf exports recover, IEA says
LONDON: The world oil market will return to a surplus in the fourth quarter of this year, the International Energy Agency said on Friday, as Middle East exports recover faster than global oil demand despite continued attacks on shipping. The agency also gave more details of remaining volumes to come from a record release of oil from its members’ emergency reserves pledged in March, saying 71…
The International Energy Agency (IEA) predicts the global oil market will return to a surplus in the fourth quarter of this year, as Middle East exports recover faster than anticipated demand. Despite attacks on shipping, Gulf oil producers are regaining lost exports using innovative methods such as dark crossings through the Strait of Hormuz.
The agency projects 71 million barrels of oil from emergency reserves will be released by the end of February, including 15 million barrels of diesel, to alleviate market tightness. Oil supply is expected to average 105 million barrels per day in Q4, 1.7 million barrels higher than previously forecast. The IEA previously anticipated a fourth-quarter supply deficit.
Brent crude prices dropped 0.1% to $95.71 a barrel following the IEA report release. OPEC+ members, comprising the Organization of the Petroleum Exporting Countries and allies like Russia, pumped 41.23 million barrels of crude in October, up 2.04 million barrels from September and 97% of pre-war February output. Despite ongoing war in Iran and tanker attacks, other analysts also foresee surplus supply.
World oil demand is expected to decrease by 2.7 million barrels in 2026, then rebound by 2 million barrels in 2027, according to the IEA. Rising output from OPEC+ and other non-OPEC+ producers like the US, Canada, Brazil, Argentina, and Guyana will contribute to this increase. However, the IEA's 2027 supply growth forecast is 1.1 million barrels lower than the previous month, partly due to a downward revision from Iran's exports, which are subject to a US blockade.
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