Oil market: Oil supply recovers for the first time since the Iran War

The International Energy Agency (IEA) sees global oil supplies on a recovery path for the first time since the outbreak of the Iran war. The oil market is showing the first cautious signs of market stabilization, the IEA announced in Paris.

For the first time since the beginning of the war, global oil supply exceeds demand. Global inventories rose by 52 million barrels in October as Gulf oil exports recovered significantly faster than global demand. A further recovery in global oil supplies is expected for 2027.

Despite ongoing attacks on oil tankers, oil exports from the Gulf states - not including Oman - reached 18.4 million barrels per day last month, according to IEA figures. That was still 26 percent less than before the outbreak of war. However, due to higher export volumes, the energy agency significantly increased its expectations for global oil supply for the rest of the year.

The production losses in the Middle East and Russia would be partly offset by higher production in countries such as the USA, Canada, Brazil and Argentina. Oil demand is expected to increase again from around March 2027. This is currently being slowed down by high fuel prices and disrupted exports of petroleum products and liquid gas from the Gulf region.

The IEA predicted that petrochemical raw materials - i.e. products that serve as raw materials for the chemical industry and are particularly hard hit by the consequences of war - would account for almost 80 percent of the increase in demand in 2027.

For now, the extremely tight supply of petroleum products - especially diesel - remains the biggest problem for the entire oil market and consumers, said the IEA. The ongoing attacks on the Russian energy infrastructure continued to severely restrict the supply of diesel from Russia to the international market.

This worsens the existing shortage of deliveries from the Middle East. At the same time, refineries in the Atlantic region, especially in the USA, were running at full speed in order to benefit from the currently high profit margins.

As the energy agency emphasized, it wants to release its emergency diesel reserves more quickly in the coming months. These additional volumes should help bridge the existing supply gap until global refineries ramp up production sufficiently and the supply of petroleum products recovers.

The IEA had already decided in March to release a record amount of 400 million barrels of crude oil from strategic oil reserves, but this has not yet been fully implemented.