Paris: The International Energy Agency (IEA) has revised its supply and demand projections, predicting that global oil supply will average 100.7 million barrels per day (mb/d) in 2026, marking a decrease of 5.7 mb/d year-on-year. This figure is also 1.3 mb/d lower than the IEA's previous projections in its last Oil Market Report (OMR). The agency has also deferred the expectation of a full recovery in oil supplies from Middle East producers until 2027.
According to Emirates News Agency, the OMR indicates that global oil demand is expected to decrease by 2.5 mb/d in 2026, which is approximately 940 thousand barrels per day (kb/d) more than the estimate in the previous month's report. The decline's pace is projected to slow from 5.3 mb/d in the second quarter of 2026 to 3.4 mb/d in the third quarter, and further to 2 mb/d by the fourth quarter of 2026.
In August, global oil production saw a month-on-month decrease of 1.6 mb/d, reaching 100.1 mb/d, as more than 10 mb/d of Gulf output remained inactive due to heightened security risks. The total oil supply is expected to fall by 5.7 mb/d to 100.7 mb/d for the year, with a rebound in Gulf production now anticipated in 2027, when production is set to increase by 8 mb/d.
Global observed oil inventories experienced a substantial drop of 95 mb in August, bringing the cumulative drawdowns since February to 507 mb, averaging 2.8 mb/d. There was a decline of 65 mb in oil on water volumes, largely due to renewed attacks on tanker traffic originating from the Middle East. Non-OECD inventories decreased by 52 mb, primarily led by China, while OECD stocks saw an increase of 23 mb as commercial tank builds outweighed a 19 mb draw in government reserves.