IEA warns 2026 oil supply gap will widen on delayed return of normal Gulf flows
· CNA · JoinRead a summary of this article on FAST.
Get bite-sized news via a new
cards interface. Give it a try.
Click here to return to FAST Tap here to return to FAST
FAST
LONDON: Global oil supply and demand will fall further than previously thought this year, the International Energy Agency said on Friday (Sep 11), as a lack of progress in ending the Iran war delays the return of normal Middle East flows into 2027 and sends fuel prices soaring.
An increase in attacks on oil tankers in Middle East shipping routes has helped send crude prices towards US$110 a barrel this week for the first time since May. But this hike is overshadowed by the surging price of fuels such as diesel, which have hit record highs.
World oil supply in 2026 is now expected to decline by 5.7 million barrels per day, or about 6 per cent, the IEA said, up from a drop of around 4 per cent seen previously. With supplies short, the world is using up inventories at a record pace. Global stocks fell by 3.1 million bpd in August, the IEA said.
"Inventories have so far played a crucial role in balancing the market," the IEA, which advises industrialised countries, said in a monthly report.
"With buffers shrinking and the global refining system stretched to the limit, the need for progress in resolving the conflict in the Middle East - and the Russia-Ukraine war, which is now in its fifth year - is greater than ever to avoid further market tightening."
Demand is also falling more than expected, partly due to record fuel prices. World oil demand will drop by 2.5 million bpd this year, the IEA said, more than its previous forecast of a 1.6 million bpd decline.
Newsletter
Week in Review
Subscribe to our Chief Editor’s Week in Review
Our chief editor shares analysis and picks of the week's biggest news every Saturday.
Sign up for our newsletters
Get our pick of top stories and thought-provoking articles in your inbox
Get the CNA app
Stay updated with notifications for breaking news and our best stories
Get WhatsApp alerts
Join our channel for the top reads for the day on your preferred chat app