The world's oil supply has swung back into surplus for the first time since the beginning of the US-Israeli war against Iran, according to the International Energy Agency (IEA). The Paris-based agency stated that oil supplies outstripped demand by almost 2 million barrels a day in October, as "Gulf exports recovered much faster than global oil demand".
The IEA reported that the 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." This follows months of disruption to the global oil market, which saw the Middle East conflict block shipments through the Strait of Hormuz.
Brent crude, the international benchmark, traded at about $72 a barrel in February before the conflict and reached $126 a barrel by the end of April. However, prices fell to $89.66 this week, their lowest level since late August, after US President Donald Trump reportedly stated the war with Iran was "effectively over." Brent crude was trading at approximately $95 a barrel on Friday.
The IEA anticipates global oil supply to average 105 million barrels a day in the final three months of the year, which is 1.7 million barrels higher than the forecast demand. The agency had previously projected a deficit for the fourth quarter. The recovery in global oil supplies has also eased pressure on emergency stockpiles, which the IEA said its members would speed up releasing, adding a further 71 million barrels to the market by the end of February.
Opec+ reported that it pumped 41 million barrels a day of crude in October, an increase from about 2 million in September, reaching 97% of its pre-war volumes. Global oil demand is expected to decrease by 2.68 million barrels a day this year to 103.2 million a day, with consumption forecast to rebound next year but remain below 2025 levels.