Global Oil Supplies Exceed Demand for First Time Since War

The International Energy Agency reports that global oil supplies are expected to exceed demand in the fourth quarter of 2026. This marks the first market surplus since the outbreak of war involving the United States, Israel, and Iran in February. Gulf exports reached 18.4 million barrels per day in October, a rise supported by Iran allowing more authorized vessels to traverse the Strait of Hormuz.

Overall supply has increased by 5.3 million barrels per day since August, while global demand is projected to drop by 2.7 million barrels per day this year. The IEA attributes this demand decline to high prices and the acceleration of vehicle electrification.

Despite the crude oil surplus, the market faces severe tightness in refined products, specifically diesel. This shortage stems from Iranian strikes on Gulf refineries and Ukrainian attacks on Russian energy installations. The IEA indicated that the release of emergency diesel stocks will be necessary until the global refining system recovers.