IEA: Attacks Endanger Middle East Oil Supply
The International Energy Agency has warned of continued diesel supply shortages in 2027, due to declining inventories and production restrictions ahead of peak winter demand. September saw a decrease in diesel exports from the Middle East and Russia by 1.3 million barrels per day. It explained that diesel refinery margins have reached nearly record levels of $95 per barrel, driven by reduced refining capacity resulting from attacks amid the U.S.-Iranian conflict, which has led to lower production quotas. The agency expects refining activity to gradually pick up until the end of the year, but the accumulated shortfall in 2026 may not be fully offset, given supply disruptions and declining reserves. The agency members are attempting to contain prices by releasing 100 million barrels of oil and diesel. Additionally, the agency forecasts a global oil demand decline of 2.6 million barrels per day in 2026, with oil supplies decreasing by 5.8 million barrels in the same year. However, an increase of 7.7 million barrels is projected for 2027, potentially leading to a market surplus.
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