The oil outlook is being cut from both directions. The International Energy Agency now expects global supply to average 100.7 million b/d in 2026, while global demand declines by 2.5 million barrels per day.
In its September Oil Market Report, published on 11 September 2026, the agency said more than 10 million b/d of Gulf production remained shut in amid heightened security risks.
The disruption has reached the monthly production data. Global output fell 1.6 million b/d month-over-month in August, to 100.1 million b/d. Gulf supply fell 2 million b/d in August to 21.9 million b/d, leaving production 10.1 million b/d below prewar levels.
The IEA cut its 2026 demand outlook by 940,000 b/d from its August report. Its supply forecast for the year is 1.3 million b/d below the previous projection and 5.7 million b/d below 2025.
Demand is now forecast to average 102.45 million b/d in 2026. The agency expects a rebound of 2.6 million b/d in 2027, taking demand to 105.01 million b/d. Even then, demand will return to its prewar February level of approximately 106 million b/d only in late 2027.
Supply is projected to increase by 8 million b/d in 2027. The agency described 2026-27 as “essentially a lost period” for oil demand growth.
The forecasts show the conflict affecting the scale of oil production and consumption together, rather than presenting a supply shock alone. How quickly Gulf capacity can return, and whether the conflict intensifies or eases, remains unclear.
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