EIA: Excess of oil supply in the fourth quarter of 2026

A International Energy Agency (IEA) provides for oversupply in the global oil market in the fourth quarter thanks to the rapid recovery of oil exports from the Persian Gulf and increased extraction in large producers in America.

In the monthly oil market report published today, the IEA considers that the contraction of supply, which has been very considerable since the start of the war launched by the United States and Israel against Iran at the end of February, will continue to slow down and will again be above 2025 levels for the first time since the crisis in March.

The most significant thing is that, compared to last month, the organisation that brings together the main energy-using countries sees the forecasts for the world oil supply for this year for a total of 101.6 million.

In October, for the second month in a row, producers added 2.3 million barrels per day, so that in those two months the increase would reach 5.3 million barrels per day.

This has reduced some of the average losses of eight million barrels per day between March and September and, above all, because exports from the Persian Gulf countries (excluding Oman) increased in October to 18.4 million barrels per day, which continues to mean less than 26% of the volume before the war.

Thus, the authors of the report have corrected the high expectations for the fourth quarter and now believe they will enter the market less 3.3 million barrels per day than in the same period last year, and that in the whole year the fall will be lower than anticipated, specifically from 4.8 million barrels per day compared to 2025.

In practice, the production losses of the Persian Gulf countries due to the difficulties in extracting oil by the Ormuz Strait are being partially offset by the ‘American quintet’ of the United States, Canada, Brazil, Argentina and Guyana, which will increase the extractions by 1.6 million barrels this year.

For 2027, the IEA estimates that the supply will accelerate the pace of recovery with 6.6 million additional daily barrels, to 108.1 million daily barrels, mainly thanks to the oil of the Persian Gulf (plus 5.3 million daily barrels), but also to a further increase in the contributions of the ‘American quintet’, of 1.1 million daily barrels.

On the demand side, the main concern remains the shortage of supplies of some refined products, in particular diesel, which weigh the losses of exports from the Persian Gulf and the repeated Ukrainian attacks on Russia’s energy infrastructure, which continues to limit the supply of international markets.

However, the decrease in demand compared to 2025 is slowing down and five million barrels per day in the second quarter and 3.8 million barrels per day in the third, to 2.7 million barrels per day in the fourth (2.7 million barrels per day for the whole year), according to the agency.

And in 2027 this movement must continue, so that in March the pre-crisis level will be exceeded and in the exercise as a whole the increase will be from two million barrels daily, to 104.3 million barrels daily.

The authors of the report point out that in October oil reserves have increased for the first time since June by 52 million barrels (equivalent to 1.7 million barrels per day) due to the oil that was in the oil tankers sailing the oceans, thanks to those that had managed to get out of the Persian Gulf.

However, land reserves continued to decrease and were at the lowest level since 2016.

The IEA considers that the accelerated exit to the market in the coming months of the oil from the strategic reserves to which its member countries have committed should serve as a “fundamental bridge” to cover the supply deficit until the refinery activity and the production of derivatives are recovered.