Key facts
- The IEA forecasts global oil demand to decline by 1 million barrels per day in 2026.
- Renewed US-Iran conflict poses a risk to oil market recovery and supply.
- Ukrainian attacks on Russian energy infrastructure have led to downgraded Russian oil output forecasts.
- Global oil supply rebounded in June, but global oil stocks increased for the first time since the US-Iran conflict began.
- A potential oil surplus in 2027 is threatened by escalating tensions and shipping risks.
The International Energy Agency (IEA) has warned that renewed hostilities between the United States and Iran could disrupt the global oil market's recovery. The agency also downgraded its projections for Russian oil production due to ongoing Ukrainian attacks on the country's energy infrastructure. The IEA has cut its Russian supply outlook for this year by 85,000 barrels per day and for next year by 150,000 bpd, citing continued strikes on refineries, storage facilities, and transport infrastructure. Russian crude output in June increased by 120,000 bpd from May to 8.86 million bpd, which is 900,000 bpd below the quota set by OPEC+.
These attacks on refineries have led to an increase in Russian crude oil exports, with shipments from western ports reaching a record high in June. The IEA estimates that global oil demand will decline by approximately 1 million barrels per day in 2026, reaching 103.5 million bpd, while maintaining a forecast for a 2 million b/d increase in global oil demand for 2027. Global oil supply rebounded by 4.1 million b/d in June to 98.8 million b/d, partly due to Middle East Gulf producers restoring output. Global observed oil stocks increased by 21 million barrels in June, the first rise since the US-Iran conflict began.