Global Oil Market Set to Return to Surplus in Fourth Quarter: IEA

The global oil market is expected to return to a surplus in the fourth quarter of 2026 as Middle East exports recover faster than demand, the International Energy Agency (IEA) said on Friday.

The agency forecast oil supply to average 105 million barrels per day (bpd) during the quarter. This would exceed projected demand by 1.7 million bpd.

The latest outlook marks a shift from the IEA’s previous forecast of a supply deficit. However, attacks on shipping continue to pose risks to oil trade.

IEA Details Remaining Emergency Oil Reserves

The IEA also provided details of further oil releases from its members’ emergency reserves.

The agency said 71 million barrels would become available by the end of February. This includes 15 million barrels of diesel aimed at easing supply tightness.

The release forms part of a record emergency reserve commitment announced by IEA members in March.

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“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 agency said in its monthly report.

Middle East Oil Exports Recover

Gulf oil producers are gradually restoring exports disrupted by the war that began in late February.

Producers have used alternative shipping arrangements to move crude through the Strait of Hormuz. These include so-called dark crossings, in which tankers switch off tracking signals to avoid detection and potential attacks.

The recovery in regional exports has contributed to the IEA’s improved supply outlook, despite continued security risks affecting shipping.

OPEC+ Production Moves Higher

The OPEC+ group produced 41.23 million bpd of crude in October, according to figures released by OPEC on Wednesday.

Output increased by approximately 2.04 million bpd from September. October production also reached 97% of the group’s pre-war February level.

The rise in production adds to signs of recovering supply as the global oil market moves towards a projected surplus.