Global oil supply is projected to decline by 5.8 million barrels per day (bpd) to an average of 100.7 million bpd this year, before rebounding by 7.7 million bpd in 2027. However, the International Energy Agency (IEA) has warned that renewed attacks in the Gulf have made the recovery fragile. According to the IEA’s monthly Oil Market Report released today, global oil supply increased by 2.5 million bpd month-on-month in September, driven by Gulf producers. However, the IEA noted that the recent escalation in attacks on regional energy infrastructure and tanker traffic threatens to derail further gains.
Meanwhile, the IEA forecast that oil demand would fall by an average of 2.6 million barrels per day in 2026. Diesel is expected to account for 25 per cent of that demand drop amid restricted product availability, soaring fuel prices and a deteriorating economic outlook linked to the West Asia conflict. Although global diesel prices have eased from the all-time highs of more than 200 dollars per barrel reached last month, yet benchmarks remain nearly double the price of crude oil and their pre-crisis levels. The agency noted that diesel markets remained under significant strain as prolonged supply disruptions forced counter-seasonal stock draws ahead of autumn refinery maintenance and peak winter demand. Global oil demand is projected to recover by 2 million barrels a day next year, less than its previous forecast of 2.6 million bpd.
