Global oil market moves to surplus as production recovers

The International Energy Agency (IEA) reported that the global oil market is shifting into a surplus for the fourth quarter of 2026, marking the first such occurrence since the Iran conflict began on February 28. Despite ongoing attacks on shipping lanes and energy infrastructure in the Middle East, global production rose to 105.4 million barrels per day in October, driven largely by increased exports from the Persian Gulf.

While Gulf exports remain 26% below pre-war levels, the overall global supply is projected to exceed demand by 1.7 million barrels per day in the final quarter of the year. This supply recovery, alongside record production levels in the United States and other regions, has significantly altered market balances and exerted downward pressure on prices, with Brent crude recently trading at 95.71 dollars per barrel.

Looking ahead, the IEA anticipates an even larger surplus for 2027. The shift from initial fears of a supply crunch to current oversupply highlights a stabilization of global energy markets despite the continued geopolitical instability in the region.