IEA reports global oil supply surplus for first time since Iran war started

Global oil supply exceeded demand for the first time since the US-Israeli war against Iran began in February, as oil exports from the Persian Gulf recovered faster than global consumption, the International Energy Agency (IEA) said in its November Oil Market Report on Friday.

The global oil market was “showing tentative signs of rebalancing, with global oil supplies surpassing demand for the first time since the outbreak of the war in Iran,” the agency said.

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IEA says global oil supply returns to surplus for first time since Iran war

Global oil production rose by 2.3 million barrels a day in October to 105.4 million barrels daily, supported by recovering exports from the Persian Gulf despite continued attacks on energy infrastructure and tankers.

The IEA said Persian Gulf oil exports, excluding Oman, reached 18.4 million barrels a day in October, still 26 percent below prewar levels.

The recovery helped reverse earlier expectations of a supply deficit, with the agency forecasting a global oil surplus in the final quarter of 2026 and a larger surplus next year.

Oil prices also eased as supplies recovered. The IEA said North Sea Dated crude fell more than 30 percent from a high of $136 a barrel on October 8 to around $93, although prices remained $22 above prewar levels.

Global oil demand is forecast to decline by 2.7 million barrels a day in 2026 to 102.3 million barrels daily, before rebounding by two million barrels a day in 2027.

The agency warned that attacks on shipping continued to threaten maritime security and the sustainability of the recovery.

It said the accelerated release of emergency diesel reserves would help ease supply shortages until global refinery output recovered.

World oil demand is forecast to fall by 2.7 mb/d in 2026, to 102.3 mb/d, before rebounding by 2 mb/d in 2027, according to the IEA Oil Market Report (OMR) for November 2026.

The year-on-year decline is set to ease to 2.7 mb/d in 4Q26, from an average 4.4 mb/d over 2Q26 and 3Q26. LPG/ethane and naphtha will account for around 80% of the increase next year as supply chains normalise, while transport fuels will see very modest gain, as high prices accelerate electrification and fuel efficiencies across the global car fleet, the monthly report noted.

Global oil demand, it said, continues to be weighed down by ongoing disruptions to exports of refined products and LPG from the Gulf, remaining at roughly half of pre-war levels, and high fuel prices.

The pace of the contraction is nevertheless set to narrow to 2.7 mb/d y-o-y in 4Q26, compared with declines of 5 mb/d in 2Q26 and 3.8 mb/d in 3Q26 – for an annual average fall of 2.7 mb/d.

The shortfall versus 2025 levels is expected to ease further before shifting to growth around March next year, resulting in an overall increase of 2 mb/d in 2027. Petrochemical feedstocks – the products most affected by the war – will account for almost 80% of 2027 gains, while high prices, electrification and fuel efficiency in the global vehicle fleet dampen the rebound in road fuels demand.

''Our November supply and demand balances suggest that the global oil market will return to a surplus in 4Q26, with a more substantial build in 2027. As always, downside risks to the forecast persist, as attacks on shipping undermine maritime security, which is pivotal to a sustained recovery,'' the report said.

Following an increase of 3 mb/d in September, global oil supply rose by a further 2.3 mb/d to 105.4 mb/d in October on lofty Gulf exports despite ongoing attacks on energy infrastructure and tankers. The higher flows underpin a sharp upward revision to 4Q26 supply, while 2027 has been lowered due to constrained Iranian shipments.

After a decline of 4.8 mb/d in 2026, oil supply is expected to rebound by 6.6 mb/d, reaching an average of 108.1 mb/d in 2027, it added.

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Global oil supply has returned to surplus for the first time since the outbreak of the Iran war, as crude shipments from the Middle East recover faster than worldwide demand. The International Energy Agency (IEA), in its November 2026 Oil Market Report, said global oil supplies exceeded demand in October, with inventories beginning to rebuild after months of disruption to international energy markets.

The Paris-based agency reported that global oil supply increased by 2.3 million barrels per day (bpd) to 105.4 million bpd in October. Its latest forecasts indicate that supply will exceed demand by approximately 1.7 million bpd during the fourth quarter of 2026. However, the agency warned that continued attacks on shipping, weak demand and tight supplies of refined products, particularly diesel, remain significant risks.

The return to a supply surplus represents a major shift in the global oil market following months of disruption caused by the conflict involving Iran.

The war affected shipments through the Strait of Hormuz, one of the world’s most important energy transportation routes. Approximately one-fifth of global oil and gas supplies normally pass through the waterway, making disruptions particularly significant for international energy markets.

Despite continued security concerns and attacks on commercial tankers, Gulf oil exports recovered during October. The IEA said global supply increased by 5.3 million bpd between August and October.

The recovery was largely driven by higher exports from Gulf producers, which helped offset production and shipment losses caused by the conflict.

According to the agency, global oil inventories increased by 52 million barrels in October, equivalent to approximately 1.7 million bpd. This marked the first monthly increase since June 2026.

The return of inventory growth indicates that additional supplies are reaching the market faster than consumers are using them.

The IEA significantly revised its expectations for the final quarter of 2026 after Gulf exports recovered more quickly than anticipated.

The agency now expects global oil supply to average approximately 105 million bpd during October–December, around 1.7 million bpd above forecast demand.

Its previous outlook had anticipated a supply deficit during the quarter.

The improvement in supply conditions has helped reduce pressure on global crude prices. North Sea Dated crude, an international benchmark, fell approximately 32% from its October 8 peak of $136 per barrel to around $93 per barrel at the time of the IEA report.

However, the agency cautioned that a return to surplus does not mean all parts of the energy market have returned to normal.

The recovery in Middle Eastern exports has been central to the changing supply outlook.

Gulf oil exports, excluding Oman, reached 18.4 million bpd in October, according to the IEA. Although this represented a substantial recovery, the figure remained 26% below pre-war levels.

Crude shipments accounted for much of the improvement, reaching approximately 15 million bpd, equivalent to 82% of their pre-war level.

OPEC+ production also increased significantly. According to Reuters’ reporting of the IEA assessment, the group produced approximately 41.23 million bpd in October, around 97% of its pre-war volumes.

Producers have used alternative shipping arrangements and other workarounds to restore exports despite continuing security risks around the Strait of Hormuz.

The recovery has not eliminated the possibility of further disruptions. Attacks on tankers and energy infrastructure could interrupt shipments again, potentially reversing some of the recent improvement.

While supply has recovered, global oil demand remains under pressure.

The IEA expects worldwide oil consumption to decline by 2.7 million bpd in 2026 to an average of 102.3 million bpd. High energy prices, supply-chain disruptions and weaker consumption of transportation fuels are contributing to the decline.

The agency expects demand to rebound by approximately 2 million bpd in 2027 as supply chains normalise and economic activity improves.

However, the recovery is expected to be uneven across different oil products.

Petrochemical feedstocks, including LPG, ethane and naphtha, are expected to account for around 80% of the projected demand increase in 2027. These products are likely to benefit from the normalisation of industrial supply chains.

Demand for conventional transportation fuels is expected to grow much more slowly. Higher fuel prices, vehicle electrification and improvements in fuel efficiency are changing consumption patterns across major markets.

The outlook suggests that even as economic activity improves, oil demand may not return quickly to its previous growth trajectory.

The IEA expects global oil production to recover further in 2027 as Gulf producers restore output and supply from other producing countries increases.

Global supply is projected to rise by 6.6 million bpd next year, reaching an average of 108.1 million bpd.

The United States, Canada, Brazil, Argentina and Guyana are expected to contribute to the increase. Together, these five countries are projected to raise production by approximately 1.6 million bpd in 2026.

The recovery in Gulf production is expected to be the largest contributor to the 2027 supply increase.

However, the IEA has also revised its 2027 supply outlook downward compared with its previous report, partly because of lower expectations for Iranian shipments.

Based on its latest supply and demand estimates, the agency expects a more substantial surplus of approximately 3.8 million bpd in 2027.

Such a surplus could create additional downward pressure on crude prices if production growth exceeds demand recovery. However, the forecast remains exposed to geopolitical developments, production decisions and unexpected changes in consumption.

Despite the improvement in crude availability, the IEA warned that refined-product markets remain under considerable pressure.

Diesel is a particular concern because disruptions to Middle Eastern exports and persistent attacks on Russian energy infrastructure have reduced supplies available to international markets.

The agency said diesel prices remained close to $180 per barrel at the time of its report, approximately 77% above pre-war levels.

Refineries are adjusting operations to take advantage of changing crude availability and product margins. US refineries have benefited from cheaper crude, while improved crude availability in Asia could support higher processing rates.

Additional Chinese product export quotas could also help increase supplies in international markets.

The IEA expects global refinery throughput to recover in the coming months. However, the recovery will take time, leaving diesel markets vulnerable to supply shortages and high transportation costs.

The agency also provided an update on the remaining volumes from the emergency oil stockpile release pledged by its member countries earlier in 2026.

Approximately 71 million barrels are expected to become available to the market by the end of February 2027. This includes around 15 million barrels of diesel intended to ease pressure on refined-product supplies.

The emergency release is designed to provide additional market supply while production, refining operations and international shipping recover.

The release of strategic reserves can help reduce immediate shortages, but it is not a permanent replacement for stable commercial production and reliable transportation routes.

The return of global oil supply to surplus marks an important change after months of energy-market disruption. Recovering Gulf exports, higher production and weaker consumption have helped rebuild inventories and reduce pressure on crude prices. The IEA’s outlook also suggests that supply could exceed demand by an even wider margin in 2027.

However, the improvement remains uneven. Crude availability has recovered faster than supplies of diesel and other refined products, while shipping security remains a major concern. The projected surplus also depends on the continued recovery of Middle Eastern exports and the absence of major new disruptions.

Oil markets will closely monitor developments around the Strait of Hormuz, production levels among OPEC+ members and the pace at which Gulf exports return to pre-war levels. Any renewed attacks on shipping or energy infrastructure could quickly change the supply outlook. Meanwhile, the expected release of emergency reserves and improving refinery operations could provide additional support to markets over the coming months.

For oil-importing economies such as India, a sustained decline in international crude prices could reduce import costs and ease pressure on inflation and fuel-related expenses. However, domestic fuel prices will also depend on currency movements, refining margins, taxes and government pricing decisions. The next several months will determine whether the current surplus develops into a more durable shift in global energy-market conditions.

The International Energy Agency (IEA) says the oil market has finally turned the corner. In its November Oil Market Report released Friday, the IEA projects that global supply will exceed demand during the fourth quarter for the first time since the Iran Conflict began, by 1.7 million barrels per day.

The world oil market has reached a situation where supply exceeds demand for the first time since the outbreak of the Iran war. The International Energy Agency sees.

The ample supply has added to pressure on oil prices. Futures at one point this week were down almost 25% for the month, easing inflation concerns and offering respite for the global economy.

For the first time since the beginning of the war between Israel and Iran, the world has more oil than it consumes. Gulf exports go back, while high prices still hold back world consumption. And barrels come back faster than needs, enough to lower prices.

Russia's oil production increased in October by 210,000 barrels a day, reaching 8.73 million barrels a day, while the resumption of deliveries in the Gulf region brought back the world oil market in surplus for the first time since the outbreak of the Iran war, according to the monthly report published on Friday by the International Energy Agency (IEA), CNBC reports.

European diesel prices remained 77% above pre-war levels even as recovering Gulf exports pushed global oil supplies above demand for the first time since the Iran war began, the International Energy Agency said on Friday.

Prices have fallen sharply in recent weeks, with North Sea Dated crude falling 32% from an early October peak of $136 a barrel to about $93 by the time the IEA wrote its report. European diesel prices fell 11% over the same period, to nearly $180 a barrel.

The IEA said diesel shortages remained the market’s “overriding concern”. Attacks on Russian energy infrastructure continued to disrupt the country’s diesel exports, adding to supply losses in the Middle East. The agency said releasing emergency diesel stocks faster over the coming months would help cover the shortfall while refinery output recovers.

Despite continued attacks on tankers, Gulf oil exports excluding Oman reached 18.4 million barrels per day in October, still 26% below pre-war levels, the Paris-based agency said in its monthly report. Crude led the recovery, while Gulf exports of refined products and liquefied petroleum gas remained at roughly half their pre-war levels.

"The oil market is showing tentative signs of rebalancing, with global oil supplies surpassing demand for the first time since the outbreak of the war in Iran," the IEA said.

Global oil supply rose by 3 million barrels per day in September and a further 2.3 million in October, reaching 105.4 million barrels per day. The IEA expects global oil supplies to exceed demand in the fourth quarter but warned that continued attacks on shipping could disrupt the recovery.

Global oil demand is forecast to fall by 2.7 million barrels per day this year, to 102.3 million, as high fuel prices and disruptions to Gulf exports weigh on consumption. The IEA expects demand to recover in 2027, though it sees only a small rise in road fuel use as more drivers switch to electric cars and vehicles become more fuel-efficient.

Some tankers are evading Iranian drones as they sail through the Strait of Hormuz by switching off their tracking signals.

LONDON – The world oil market will return to a surplus in the fourth quarter of 2026, the International Energy Agency (IEA) said on Nov 13, 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 million barrels would be made available by the end of February, including 15 million barrels of diesel to ease market tightness.

Oil supply will average 105 million barrels per day (bpd) in the fourth quarter, the Paris-based agency, which advises industrialised countries, said in a monthly report, 1.7 million bpd higher than forecast demand.

“The oil market is showing tentative signs of rebalancing, with global oil supplies surpassing demand for the first time since the outbreak of the war in Iran,” the agency said in the report.

Oil prices reversed earlier gains after the IEA report was released. Brent crude was last down 0.1% at US$95.71 a barrel.

The report follows various signs that Gulf oil producers are recovering exports disrupted since the start of the war in late February by using workarounds such as so-called dark crossings through the Strait of Hormuz, where tankers switch off tracking signals to evade attack.

The OPEC+ group, which includes the Organization of the Petroleum Exporting Countries and allies such as Russia, pumped 41.23 million bpd of crude in October, OPEC said on Nov 11, up about 2.04 million bpd from September and 97% of the pre-war February volume.

Other analysts have also forecast a return to excess supply, despite the lack of a resolution to the Iran war and continuing tanker attacks in the Gulf. JPMorgan last week forecast a global surplus of 1.4 million bpd in October.

High oil prices have also curbed demand in 2026, helping tip the balance into a surplus.

World oil demand is forecast to fall by 2.7 million bpd in 2026 to 102.3 million bpd before rebounding by 2 million bpd in 2027, the IEA said, little changed from its previous forecasts.

As well as rising output from OPEC+, the IEA flagged supply rising from outside the group.

Production from the United States, Canada, Brazil, Argentina and Guyana will rise by 1.6 million bpd in 2026, the IEA said.

In 2027, global supply is projected to rise by 6.6 million bpd to 108.1 million bpd, led by a further recovery in Gulf output.

Still, the 2027 supply growth forecast is down 1.1 million bpd from October, and the lower outlook partly reflects a downward revision from Iran, the IEA said. Iran is subject to a US blockade that has curbed its oil exports.

For 2027, the IEA sees the supply surplus at about 3.8 million bpd, slightly down from a 3.94 million bpd surplus last month.

The world oil market is tipping back into surplus as exports from the Persian Gulf recover faster than demand, the International Energy Agency said on Friday. "The oil market is showing tentative signs of rebalancing, with global oil supplies surpassing demand for the first time since the outbreak of the war in Iran," the Paris-based agency wrote in its monthly Oil Market Report [1].

Global supply rose by 2.3 million barrels a day to 105.4 million b/d in October, after a 3 million b/d increase in September, lifting output by 5.3 million b/d since August despite attacks on energy infrastructure and tankers [1]. The IEA raised its fourth-quarter supply estimate by 3.3 million b/d and said its balances point to a surplus this quarter, with "a more substantial build in 2027" [1]. Reuters put the fourth-quarter surplus at 1.7 million b/d, reversing the deficit the agency forecast a month ago [2]; Bloomberg, reading the same report, put it at roughly 2 million b/d and said the IEA now sees a 2026 average deficit of 685,000 b/d, down from 1.7 million b/d previously [3].

Gulf oil exports excluding Oman reached 18.4 million b/d in October, still 26% below pre-war levels, the IEA said [1]. Crude led the recovery, with flows of 15 million b/d, equal to 82% of pre-war volumes, while exports of refined products and LPG from the region remain at roughly half their pre-war levels [1]. Saudi Arabia raised crude output to 10 million b/d and Iraq's production reached a seven-year high of 4.6 million b/d, according to the report as cited by Bloomberg [3]. OPEC+ crude output was 41.23 million b/d in October, 97% of its pre-war February level, Reuters reported [2].

Producers outside the Gulf are adding barrels too. The "Americas Quintet" of the United States, Canada, Brazil, Argentina and Guyana is on track to raise output by 1.6 million b/d this year and a further 1.1 million b/d in 2027 [1]. For 2027, the IEA expects global supply to recover by 6.6 million b/d to 108.1 million b/d, including a 5.3 million b/d increase in Gulf production, though it lowered its 2027 outlook because of constrained Iranian shipments [1].

World demand is forecast to fall 2.7 million b/d in 2026 to 102.3 million b/d, held down by high fuel prices and lost Gulf product exports [1]. The year-on-year decline is set to narrow to 2.7 million b/d in the fourth quarter from 5 million b/d in the second quarter and 3.8 million b/d in the third, and to turn into growth around March [1]. Petrochemical feedstocks such as LPG, ethane and naphtha will account for about 80% of next year's 2 million b/d gain, while "high prices, electrification and fuel efficiency" in the global car fleet limit the rebound in road fuels [1].

Observed global inventories rose 52 million barrels, or 1.7 million b/d, in October, the first increase since June, as oil on water jumped 86 million barrels to its highest since January [1]. On-land stocks kept falling and are at their lowest since at least 2016; OECD stocks fell 47 million barrels, and observed global stocks are down a cumulative 462 million barrels since the war began [1].

Diesel is the pinch point. European diesel prices have fallen 11% since early October but, near $180 a barrel, are still 77% above pre-war levels, and attacks on Russian energy infrastructure continue to cut that country's diesel exports [1]. The IEA called product tightness "the overriding concern of the broader market and consumers" [1]. IEA members will speed up the release of remaining emergency stocks, discharging a further 71 million barrels, including 15 million barrels of diesel, through the end of February [2][3].

North Sea Dated crude fell 32% from a high of $136 a barrel on Oct. 8 to about $93 when the report was written, still $22 above pre-war levels, the IEA said [1]. Brent futures were at $95.87 and WTI at $88.49 early Friday (around 05:45 GMT), and crude was heading for a second straight weekly loss despite two days of gains on Middle East attacks, Oilprice.com reported [4]. Brent settled up more than 3% at $95.82 on Thursday [5] and held near $95 in Asian trade.

The IEA warned that "attacks on shipping undermine maritime security, which is pivotal to a sustained recovery" [1]. Iran has reported four tankers struck in the Strait of Hormuz, Houthi forces have targeted a pumping station on Saudi Arabia's East-West pipeline and a facility in Yanbu, and President Donald Trump said this week, "We don't need a deal with Iran" [4]. Freight rates for Middle East crude bound for Asia held near records in October [1].

Global oil supplies have surpassed demand for the first time since the outbreak of the conflict involving Iran, signaling a potential turning point for international energy markets, according to the Oil Market Report released by the International Energy Agency on Friday, November 13, 2026. Global production expanded as Persian Gulf exports recovered faster than global consumption, reversing earlier expectations of a supply deficit for the final quarter of the year.

The global oil market is experiencing tentative signs of rebalancing. According to the agency, global production expanded by 3 million barrels per day in September and rose by another 2.3 million barrels per day in October, bringing total production to 105.4 million barrels daily. Persian Gulf oil exports, excluding Oman, reached 18.4 million barrels per day in October. While this marked a major rebound, export volumes remained 26 percent below pre-war levels. Crude oil led this recovery, with flows reaching 15 million barrels per day, equivalent to 82 percent of pre-war volumes, while refined products and liquefied petroleum gas lagged at roughly half of their pre-war levels. Furthermore, observed global inventories rose by 52 million barrels in October, marking the first monthly increase since June.

Producers outside the Gulf also contributed to the rising totals. According to reporting cited from MLQ.ai, the United States, Canada, Brazil, Argentina, and Guyana are on track to raise output by 1.6 million barrels per day over the course of the year. Meanwhile, The Straits Times noted that the OPEC+ group pumped 41.23 million barrels per day in October, representing 97 percent of pre-war February volumes.

The supply expansion helped ease pressure on benchmark crude prices. North Sea Dated crude fell from its early peak of $136 a barrel down to approximately $93 by the time of the report, though prices remained $22 above pre-war levels, as reported by Lapaasvoice. Futures fell for a second consecutive week, offering some relief to the wider economy, as detailed by Morningstar.

Despite the broader crude surplus, refined products remained severely constrained. As Euronews reported, European diesel prices hovered near $180 a barrel, remaining 77 percent above pre-war levels. Attacks on energy infrastructure in Russia and disruptions in the Middle East continued to restrict diesel flows, keeping product tightness at the center of market concerns. To ease these shortages, member countries of the energy agency will accelerate the release of remaining emergency stocks, discharging 71 million barrels—including 15 million barrels of diesel—through the end of February.

The agency warned that the fragile recovery remains vulnerable to maritime security threats. Shipping lanes through the Strait of Hormuz have seen continued attacks, with some tankers turning off tracking signals to evade drones, and infrastructure targets struck in Saudi Arabia.