IEA Says Global Oil Supply Is in Surplus Since US-Israeli War With Iran
“The war with Iran was effectively over,” Donald Trump told reporters, helping push international oil benchmarks down to their lowest levels since late August.
Global oil supplies have swung back to a surplus for the first time since the start of the US-Israeli war against Iran, the International Energy Agency said. Oil supplies outstripped demand by nearly 2m barrels a day in October, according to the Paris-based agency, driven by Gulf exports recovering much faster than global oil demand.
The market is showing tentative signs of rebalancing after months of severe disruption. The Middle East conflict previously blocked shipments through the Strait of Hormuz, through which a fifth of the world’s oil and gas supply normally passes.
Brent crude traded at about $72 a barrel in February before the conflict began, but surged to $126 a barrel by the end of April. Prices dropped to $89.66 this week before trading at about $95 a barrel on Friday, The Guardian reported.
Concerns remain regarding continued attacks on oil tankers in the Middle East. Recent reports indicate senior Iranian officials believe the US could be planning further military strikes.
The IEA expects global oil supply to average 105m barrels a day in the final three months of the year. That figure sits 1.7m higher than forecast demand, reversing the agency’s previous expectations of a fourth-quarter deficit.
Emergency stockpiles have felt less pressure as global supplies recover. IEA members plan to speed up the release of remaining emergency oil stockpiles pledged earlier this year, adding 71m barrels to the market by the end of February.
These emergency stocks are held in refineries, oil terminals, power stations, and at offshore fields in the North Sea. The Organization of the Petroleum Exporting Countries announced that the cartel pumped 41m barrels a day of crude in October.
Opec+ output rose from about 2m barrels a day in September, reaching 97% of prewar volumes. Meanwhile, global oil demand is expected to fall by 2.68m barrels a day this year to 103.2m a day.
Consumption is forecast to rebound next year but will remain below 2025 levels. Growth is expected mostly in petrochemical feed stocks as vehicle fuel markets face high prices, electrification, and increased fuel efficiency.