IEA warns global oil supply will fall short of demand

Global oil markets are facing a significant supply shortfall as disruptions linked to the Middle East conflict continue to constrain output, according to the International Energy Agency, cited by The Moscow Times.

The agency said ongoing restrictions on tanker traffic through the Strait of Hormuz have severely impacted exports from Persian Gulf producers.

“As tanker traffic through the Strait of Hormuz remains constrained, the cumulative volume of lost supply from Persian Gulf countries has already exceeded 1 billion barrels, and more than 14 million barrels per day are currently offline — this is an unprecedented supply shock,” the report stated.

Under its baseline scenario, the IEA expects shipping through the strategic waterway to gradually recover starting in the third quarter.

However, the agency has sharply revised its market outlook. It now forecasts that global oil supply in 2026 will fall short of demand by 1.78 million barrels per day — a major shift from earlier projections. In April, the IEA had expected a surplus of 410,000 barrels per day, while its December forecast pointed to an excess of nearly 4 million barrels per day.

Production forecasts have also been downgraded, with supply now expected to decline by about 3.9 million barrels per day in 2026, compared with a previously anticipated drop of 1.5 million barrels per day.

On the demand side, the agency now expects global consumption to decrease by 420,000 barrels per day this year, a significantly steeper decline than the previously forecast reduction of 80,000 barrels per day.

According to the report, rising prices are putting pressure on consumption, contributing to demand destruction and slowing global economic growth.

By Tamilla Hasanova