IEA projects 1.8 million bpd global oil deficit in third quarter
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The IEA slashed its 2026 global oil supply forecast, projecting supply to fall 4.3 million barrels per day to 102.02 million bpd and an annual deficit of 1.27 million bpd. For the third quarter, the agency sees a 1.8 million bpd deficit, a 1 million bpd downward revision from July and the deepest quarterly deficit since Q4 2021. The IEA assessment adds to evidence challenging U.S. claims that Middle East oil flows have returned to normal.
Key Facts
- The IEA now expects global oil supply to fall by 4.3 million barrels per day in 2026, leaving output at 102.02 million bpd, the lowest forecast for 2026 so far.
- The IEA projects a 1.8 million bpd global oil deficit in the third quarter, a 1 million bpd downward revision from July and the deepest quarterly deficit since Q4 2021.
- Global oil consumption is forecast to contract by 1.6 million bpd in 2026, compared with a roughly 1 million bpd decline projected in July.
- Observed global oil inventories fell below 7.9 billion barrels in July for the first time since April 2025, and stocks have fallen by 410 million barrels since the Iran war began.
- Middle East oil production remained 8.3 million bpd below pre-war levels in July, while loadings dropped from 20 million bpd in early July to 12 million bpd later in the month.
Supply Forecast Revision
The IEA cut its 2026 global oil supply outlook to 102.02 million barrels per day, a decline of 4.3 million bpd from 2025 and its lowest forecast for 2026 so far. The revision is deeper than the 3.7 million bpd decline projected in July and leaves global supply 1.27 million bpd below demand for the year, compared with an 860,000 bpd deficit implied by July forecasts. For the third quarter, the IEA projects a 1.8 million bpd deficit, a 1 million bpd downward revision from July and the deepest quarterly deficit since the fourth quarter of 2021. Middle East oil loadings briefly returned to 20 million bpd in early July before falling to 12 million bpd later in the month, while Middle East production remained 8.3 million bpd below pre-war levels in July. The IEA cited the Hormuz shutdown, the U.S. blockade of Iranian exports, attacks in the Bab el-Mandeb Strait and reduced Kazakh CPC Blend exports among the forces keeping global supply below demand.
Demand and Refining Pressure
The IEA now expects global oil consumption to contract by 1.6 million bpd in 2026, compared with a roughly 1 million bpd decline forecast in July. High prices and restricted supplies of refined fuels are forcing consumers to cut consumption, particularly in Asia and the Middle East. Global crude processing fell 5 million bpd year-over-year in July, while Russian refinery runs remained near a 20-year low of 3.9 million bpd following Ukrainian drone attacks. Russian fuel exports plunged to 1.4 million bpd, nearly half their July 2025 level.
Inventory Drawdown and Contested Flow Data
The IEA estimates global oil stocks have fallen by 410 million barrels since the Iran war began, and observed inventories dropped below 7.9 billion barrels in July for the first time since April 2025. The IEA’s 2027 outlook for a 4.61 million bpd supply surplus assumes Middle East hostilities de-escalate and disrupted oil flows recover. Energy Secretary Chris Wright said Tuesday that total regional oil flows were averaging about 15 million bpd and exceeded pre-war levels on Sunday. Kpler said its vessel-tracking data cannot be reconciled with those figures, while the EIA said Hormuz transits remain severely constrained.
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IEA projects 1.8 million bpd global oil deficit in third quarter
