IEA Forecasts Global Oil Market Surplus in Late 2026 as Gulf Exports Rebound

The International Energy Agency said on Friday that the global oil market is set to return to surplus in the fourth quarter of 2026, the first surplus since the outbreak of the Iran war, as exports from the Gulf recover. According to Reuters' account of the November Oil Market Report, the agency expects supply to average 105 million barrels per day in the quarter, about 1.7 million bpd more than forecast demand. Its previous report had projected a shortfall through the fourth quarter.

The swing is coming mostly from supply. Global output rose by a further 2.3 million bpd in October to 105.4 million bpd, and Gulf supply excluding Oman reached 18.4 million bpd, still roughly 26% below pre-war levels, according to figures carried in coverage of the report. Saudi Arabia lifted crude production to 9.99 million bpd and Iraq to 4.6 million bpd, its highest in seven years. Observed global inventories rose by 52 million barrels in October. Demand is doing the rest: the IEA expects world consumption to fall by 2.7 million bpd in 2026 to 102.3 million bpd after high prices curbed use, before rebounding by 2 million bpd in 2027.

For 2027 the agency projects supply rising 6.6 million bpd to 108.1 million bpd and a surplus of about 3.8 million bpd, slightly smaller than the 3.94 million bpd it forecast a month earlier. The crude picture is not the whole story: European diesel traded around $180 a barrel in October, roughly 77% above pre-war levels, because of damage to refineries in the Gulf and Russia, so product markets may stay tight even as crude loosens. Brent was near $95.71 when Reuters published. The next checkpoints are the OPEC+ ministers' meeting on November 29 and whether tanker attacks around the Strait of Hormuz keep Gulf flows from rebuilding further, which matters for producers such as XOM and CVX and for refiners' margins.