Global oil supply sharply rebounded in September, but the gains remain fragile because of increasing attacks on energy targets by Iran and the Yemen-based Houthis, the IEA said today.
In its latest Oil Market Report (OMR), the IEA said global oil supply increased by 2.5mn b/d in September from August, driven by higher output and exports from the Mideast Gulf.
Exports from the region rose by 4.4mn b/d on the month to 13.9mn b/d, around 75pc of levels seen before the US-Iran war. Flows through the strait of Hormuz increased by 3.7mn b/d to 10.9mn b/d, elevated by ship-to-ship transfers in the Gulf of Oman, the IEA said.
Still, the agency downgraded its global oil supply forecast for this year. It now sees supply falling by 5.76mn b/d to 100.65mn b/d, compared with a 5.67mn b/d fall in September's OMR. It sees supply rebounding by 7.67mn b/d to 108.32mn b/d in 2027.
The IEA said global refinery runs remained constrained by the effects of the US-Iran war, and by lower runs in Russia and Asia-Pacific. Product flows from the Middle East have risen in recent weeks but remain half of pre-war levels, the agency said.
The world is particularly short of diesel, it said. Global diesel availability fell by 1.5mn b/d in the second quarter and by 1.7mn b/d in the third quarter, compared with year-earlier levels, and middle distillate flows are likely to remain constrained well into 2027.
The IEA forecasts global oil demand will fall by 2.62mn b/d to 102.38mn b/d this year, lower by 120,000 b/d from its September projection. It sees demand rebounding by 2mn b/d to 104.38mn b/d next year, which is 560,000 b/d below its prior forecast and still below 2025.
The IEA's projections imply that even with a sharp fall in demand the global oil market will be in a supply deficit of 1.73mn b/d this year.
It said global observed oil inventories were 509mn bl below pre-war levels at the end of September, with on land stocks at their lowest since at least 2016.
