IEA says oil market returning to surplus as Gulf exports recover
The Paris-based agency raised its fourth-quarter supply forecast and reported the first build in global inventories since June, though diesel remains tight.
The International Energy Agency said the world oil market will move into surplus in the fourth quarter of 2026, as crude exports from the Gulf recover faster than demand despite continued attacks on shipping.
In its monthly Oil Market Report published on Friday, the Paris-based agency, which advises industrialised countries, said supply would average about 105 million barrels a day in the fourth quarter, roughly 1.7 million barrels a day more than forecast demand. It had previously projected a deficit for the period, according to Arab News.
"The oil market is showing tentative signs of rebalancing, with global oil supplies surpassing demand for the first time since the outbreak of the war in Iran," the agency said in the report, as quoted by Arab News.
Global supply rose 2.3 million barrels a day month on month to 105.4 million barrels a day in October, Oil & Gas Journal reported, after a 3 million barrel a day increase in September. Output has climbed 5.3 million barrels a day since August as Gulf exports returned.
Gulf exports excluding Oman reached 18.4 million barrels a day in October, about 26 percent below prewar levels, with crude exports at 15 million barrels a day, or 82 percent of prewar volumes, according to Oil & Gas Journal's account of the report.
The agency raised its fourth-quarter supply estimate by 3.3 million barrels a day. It expects global supply to fall by an average 4.8 million barrels a day over 2026 as a whole before rebounding by 6.6 million barrels a day in 2027 to 108.1 million barrels a day.
Prices have eased. North Sea Dated crude fell 32 percent from an early-October high of $136 a barrel to about $93 by the time of the report, though still $22 above prewar levels, Oil & Gas Journal reported. Arab News reported Brent down 0.1 percent at $95.71 after the report was released at 0900 GMT.
Demand is forecast to fall 2.7 million barrels a day in 2026 to 102.3 million barrels a day, before rebounding by about 2 million barrels a day in 2027 to 104.3 million, the agency said. Chinese demand fell 1.3 million barrels a day year on year in September, a 7.1 percent decline, on high fuel prices and a slower economy.
The IEA also gave details of the record release of emergency reserves pledged by its members in March, saying 71 million barrels would be available by the end of February, including 15 million barrels of diesel, Arab News reported.
Refined products remain tight. European diesel prices fell 11 percent from early October but stayed near $180 a barrel, about 77 percent above prewar levels, Oil & Gas Journal reported. The IEA cautioned that continued attacks on shipping remain a significant downside risk to supply, and said accelerated release of emergency diesel stocks would help bridge the gap until refinery output recovers.
OPEC said on Wednesday that the OPEC+ group pumped 41.23 million barrels a day of crude in October, up about 2.04 million barrels a day from September and 97 percent of prewar February volumes, according to Arab News. JPMorgan forecast a global surplus of 1.4 million barrels a day in October.
How the reports differ
Arab News led with the fourth-quarter surplus and the IEA's line about "tentative signs of rebalancing", and was alone in reporting the 71 million barrels of emergency reserves still to be released, a Brent price of $95.71 and the JPMorgan surplus forecast. Oil & Gas Journal carried the fullest set of figures, including October supply of 105.4 million barrels a day, the 32 percent fall in North Sea Dated crude to about $93 a barrel, and the slump in Chinese demand. Reuters framed the story simply as a market returning to surplus on recovering Gulf exports; The Straits Times ran the same headline, and the Financial Times described markets "swinging" to surplus on a Gulf shipments rebound.
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