Global Oil Supply Outpaces Demand Despite Hormuz Shipping Threats

The International Energy Agency reports that global oil supply is outpacing demand for the first time since the start of the war. This surplus is driven by record production in the United States, Brazil, and Guyana, alongside increased output from Iraq and Kuwait. Saudi Arabia reported pumping 10.5 million barrels a day in October, while the United Arab Emirates has contributed further to the supply by operating without OPEC quotas.

This abundance has pressured prices, causing Brent crude to fall below $90 a barrel and futures to drop nearly 25% for the month. Despite these price drops, European diesel and general shipping costs remain historically high.

Market stability persists despite ongoing tanker attacks and threats to navigational equipment near the Strait of Hormuz. Khalid Alhammad, president of ship management for Bahri, noted that national shipping companies have no choice but to continue moving energy through the chokepoint. Industry leaders indicate that Gulf shipments are returning toward pre-war levels, demonstrating resilience in the face of regional instability.