IEA says world oil supply exceeded demand for first time since Iran war began

Supply moves ahead of demand

The International Energy Agency said in its monthly oil market report, published on Friday, 13 November 2026, that world oil supply had overtaken demand for the first time since the war involving Iran began at the end of February. Supply rose by 2.3 million barrels per day in October, to 105.4 million, which the agency linked to strong Gulf exports despite continued attacks on energy infrastructure and oil tankers. The agency described the market as showing early, cautious signs of stabilising.

“The oil market is showing tentative signs of rebalancing”

Gulf exports and stock build

Oil exports from the Gulf states, excluding Oman, reached 18.4 million barrels per day in October. That was still 26% below the level before the war. Global observed inventories rose by 52 million barrels in October, an average of 1.7 million barrels per day, the first increase since June after falling 1.9 million barrels per day over the previous three months. The IEA raised its supply outlook for the rest of the year. It said output increases in the United States, Canada, Brazil, Argentina and Guyana would add 1.6 million barrels per day this year, partly offsetting losses in the Middle East and Russia.

Demand, diesel and reserves

Demand is forecast to fall by 2.7 million barrels per day in 2026, to 102.3 million, before rebounding by 2 million barrels per day in 2027. The IEA expects demand to start rising again from around March 2027, but high fuel prices and disrupted Gulf exports of refined products and LPG still hold it back, with those exports at about half their pre-war level. Petrochemical feedstocks are expected to account for almost 80% of demand growth in 2027. Diesel remains the most acute problem. Continued attacks on Russian energy infrastructure have sharply cut Russian diesel supply to international markets, compounding the loss of Middle Eastern deliveries, while refineries in the Atlantic basin, especially in the United States, run at full tilt to capture high margins. The IEA said it will accelerate the release of its diesel emergency reserves in the coming months to help bridge the current supply gap.

2026 supply forecast101.6

2026 demand forecast102.3

2027 supply forecast108.1

2026 supply forecast

101.6 mb/d

2026 demand forecast

102.3 mb/d

2027 supply forecast

108.1 mb/d

Data from the article text

Prices and what remains

Dated Brent is priced around $95 a barrel, down from $136 in early October, according to the Financial Times. Jet fuel and diesel prices have stayed stubbornly high, and most of the added supply is crude, which does not immediately ease product shortages because refining capacity is short. Spencer Dale, a professor at the London School of Economics, said that weaker crude prices would not necessarily relieve pressure on the real economy, on households and on businesses, while refining shortages persist. Rebuilding global stocks, particularly those for refined products, will take many months of surplus. The IEA projects supply rising again in 2027 to 108.1 million barrels per day, an increase of 6.6 million.