Energy Agency expects oil supply drop in 2026
The International Energy Agency has lowered its global oil supply forecasts for 2026 amid rising tensions in the Middle East and their impact on shipping through major maritime routes. Oil supplies are expected to decline by approximately 4.3 million barrels per day, or about 4%, reaching 102.02 million barrels daily, resulting in a market deficit estimated at around 1.27 million barrels per day—an increase from July’s forecast of 860,000 barrels. Tensions in the region have escalated, with attacks on oil tankers and intensified conflicts, leading to a reduction in Middle Eastern production by about 8.3 million barrels per day from pre-war levels. The deficit is projected to widen during the third quarter of 2026 to approximately 1.8 million barrels daily, the largest since the end of 2021. If the region remains stable, the agency expects global supply to surpass demand by about 4.61 million barrels in 2027, potentially helping to restore oil inventories to pre-crisis levels.
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