IEA flips to fourth-quarter oil surplus as Gulf exports outrun demand
The world oil market will return to surplus in the fourth quarter, the International Energy Agency said, as Middle East exports recover faster than global oil demand despite continued attacks on shipping. The Paris-based agency now expects supply to average 105 million barrels a day in the quarter, 1.7 million bpd above forecast demand, reversing its earlier call for a deficit.
"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," the IEA said in its monthly report. Brent crude reversed earlier gains after the 0900 GMT release and was last down 0.1% at $95.71 a barrel.
The recovery has come through workarounds, including so-called dark crossings through the Strait of Hormuz where tankers switch off tracking signals to evade attack. OPEC+ pumped 41.23 million bpd of crude in October, OPEC said, up about 2.04 million bpd from September and 97% of the pre-war February volume. JPMorgan separately forecast a global surplus of 1.4 million bpd in October.
High prices have also weighed on consumption. The IEA sees world oil demand falling 2.7 million bpd in 2026 to 102.3 million bpd before rebounding 2 million bpd in 2027, little changed from previous forecasts. Supply outside OPEC+ is rising too, with output from the United States, Canada, Brazil, Argentina and Guyana up 1.6 million bpd this year.
The agency also detailed the record release of emergency reserves pledged in March, saying 71 million barrels would be made available by the end of February, including 15 million barrels of diesel, and suggested members assess whether more diesel releases are needed. For 2027 it projects supply rising 6.6 million bpd to 108.1 million bpd, a growth forecast cut by 1.1 million bpd from last month partly on a downward revision from Iran, which faces a US blockade. The 2027 surplus is seen at about 3.8 million bpd, slightly below last month's 3.94 million bpd.
