IEA says oil market tips into surplus as Gulf exports rebound despite tanker attacks
For the first time since the war in Iran began, the world is pumping more oil than it uses. The International Energy Agency said on Friday that a faster-than-expected recovery in Gulf exports had pushed supply above demand, even as tankers in the region remain under attack.
Supply comes back fast
October's gain followed a 3 mb/d jump in September, lifting output by 5.3 mb/d since August, the Paris-based agency said. Saudi Arabia raised crude production to 10 mb/d last month and Iraq reached a seven-year high of 4.6 mb/d, according to The Edge, citing the report.
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.
Total Gulf shipments are still 26% below where they were before the war. But the IEA said "Gulf exports recovered much faster than global oil demand."
Stocks rebuild — mostly at sea
The 52-million-barrel rise in observed inventories was driven by oil on water, which surged 86 million barrels to its highest level since January. On-land stocks kept falling and remain at their lowest since at least 2016, the IEA said.
The Edge reported that IEA members will release a further 71 million barrels from emergency stockpiles through the end of February.
The numbers that matter
| Indicator | IEA November figure |
|---|---|
| Global supply, October | 105.4 mb/d |
| Gulf exports ex-Oman, October | 18.4 mb/d |
| World demand, 2026 | 102.3 mb/d (down 2.7 mb/d) |
| World supply, 2027 forecast | 108.1 mb/d |
| North Sea Dated | about $93/bbl, from $136 high |
Source: IEA Oil Market Report, November 2026.
Demand stays weak
The IEA expects demand to fall 2.7 mb/d this year before rebounding by 2 mb/d in 2027. Xinhua reported the agency sees the year-on-year contraction easing to 2.7 mb/d in the fourth quarter, from 5 mb/d in the second and 3.8 mb/d in the third.
High prices, electrification and better fuel efficiency are holding back road-fuel use, the agency said. For 2026 as a whole, the market still faces an average deficit of 685,000 barrels a day, The Edge reported, far smaller than the 1.7 million a day projected a month ago.
Diesel is the weak link
Refined products and LPG from the Gulf are still disrupted, and diesel prices in Europe, down 11% since early October, remain far above pre-war levels. Global refinery runs fell to a seasonal low of 81.3 mb/d in October and are forecast to recover to 84.7 mb/d in December.
For now, the cushion is real but thin: North Sea Dated crude is still about $22 a barrel above its pre-war level, the IEA said.