The International Energy Agency (IEA) has cut its 2026 global oil supply outlook again, pointing to a steeper contraction than it projected a month ago. In a report released on Friday, the agency said world oil supply is now expected to fall by 5.7 million barrels per day in 2026, or roughly 6%, compared with its previous forecast for a 4.3-million-bpd decline.
The IEA also removed another 1.4 million barrels per day from its 2026 supply outlook and said it no longer expects normal Gulf oil flows to resume this year. According to the agency, delays in the recovery of Middle Eastern production have pushed the return of regular Gulf supplies into 2027.
The report said global oil inventories fell at a pace of 3.1 million bpd in August, leaving stocks at 7.8 billion barrels, the lowest level since 2023. In July, the IEA estimated the cumulative inventory draw since the Iran war began at 410 million barrels.
A large share of the August deterioration came from Saudi Arabia. The country’s crude supply dropped by 2.3 million bpd during the month to just 6 million bpd, its lowest level in more than three decades, after attacks hit facilities and shipping routes. OPEC+ production also fell by 1.8 million bpd to 38.8 million bpd.
The IEA said the supply crunch is already eroding demand. It now expects global oil consumption to fall by 2.5 million bpd this year, versus the 1.6-million-bpd contraction it forecast in August. Record fuel prices and refinery disruptions are tightening diesel and other refined product markets and forcing consumers to cut use.
The revision leaves the IEA nearly 2.9 million bpd apart from OPEC on 2026 demand. OPEC said on Thursday that it still expects global oil consumption to grow by 380,000 bpd this year. The two outlooks are closer for 2027: the IEA sees demand growth of 2.6 million bpd next year, while OPEC projects 2.36 million bpd.
