Global oil market to see surplus in Q4 2026 despite conflict

The International Energy Agency (IEA) reported that the global oil market is shifting toward a surplus in the fourth quarter of 2026. This trend occurs for the first time since the outbreak of the war in Iran on February 28, 2026, marking a significant change in market dynamics as production recovery outpaces demand.

According to the IEA's November report, supply is expected to exceed demand by 1.7 million barrels per day (mbpd) during the final quarter of the year. Global oil production reached 105.4 million barrels per day in October, driven by an increase in exports from the Gulf, despite ongoing security threats to energy infrastructure. While Gulf exports remain 26% below pre-war levels, the overall supply rebound has led the IEA to revise its previous deficit forecasts.

Following the announcement, international oil prices saw a slight decline, with Brent crude dropping by 0.1% to $95.71 per barrel. The IEA further projects that this surplus trend is likely to expand significantly throughout 2027 as production capacities continue to stabilize across the region.