IEA Sees Oil Surplus as Gulf Exports Recover

The world oil market is heading back into surplus. The International Energy Agency said Friday that global supply in the fourth quarter of 2026 will average 105 million barrels per day — about 1.7 million barrels a day more than the world is expected to burn.

It's the first time supply has surpassed demand since the Iran war began, and it's a reversal of the agency's own previous forecast, which had the fourth quarter in deficit. The swing comes as Gulf exports recover.

The demand side is doing half the work. The IEA expects demand to fall by 2.7 million barrels a day in 2026, to 102.3 million barrels a day, before rebounding by about 2 million barrels a day in 2027.

Next year doesn't tighten the picture much. The agency projects supply rising 6.6 million barrels a day in 2027, to 108.1 million barrels a day, leaving a surplus of roughly 3.8 million barrels a day — slightly narrower than the 3.94 million it projected last month.

There's still a cushion in reserve. Some 71 million barrels remain available for release by the end of February, the agency said, including 15 million barrels of diesel.

Traders didn't chase the news. Brent crude gave up early gains after the report landed at 09:00 GMT, and was last down 0.1% at $95.71 a barrel.

Wall Street saw the turn coming. JPMorgan had already forecast an October surplus of 1.4 million barrels a day — the market just needed the IEA to say it out loud.