The International Energy Agency (IEA) has estimated about 2.8 billion barrels of oil exports shortfalls since the US-Iran war began.
At the centre of the conflict is the strait of Hormuz, a major route of significant world’s oil export, disrupted by the struggle for control between the US and Iran.
However, IEA reports that alternative supply, stock draws and lower demand have filled much of the gap.
According to IEA in its latest Oil Market Report (OMR), flows through the strait averaged 7. 6 million barrels a day (b/d) in August, around 13.1mn b/d below pre-war levels.
The report further noted that exports through routes bypassing Hormuz have offset more than 500mn bl, or an average of 2.8mn b/d, of the losses since the conflict started. Combined exports from Saudi Arabia’s Yanbu and the UAE’s Fujairah rose from 4.1mn b/d in February to 7.8mn b/d in June, before Houthi attacks in the Red Sea cut flows to 5.5mn b/d in August.
Increased production outside the Mideast Gulf from countries including the US, Brazil, Kazakhstan, Venezuela and Nigeria has offset a further 420mn bl of the cumulative losses, the IEA said.
The rest of the deficit appears to have been absorbed by stock draws and lower demand. The IEA said global observed stocks were drawing at record rates and stood 507mn bl lower than before the start of the war.
The agency puts cumulative global demand reductions since the start of the conflict at more than 1bn bl, driven by steep falls in China and the Middle East. It said apparent Chinese demand over the past six months was running around 1.7mn b/d below February levels, reflecting lower imports, refinery activity and product deliveries.
The impasse in negotiations between the US and Iran has delayed the prospect of a normalisation of flows through the strait of Hormuz until next year, according to the IEA. The agency now assumes shipping through the strait will remain restricted throughout 2026.
Fighting has escalated between the US and Iran in the Mideast Gulf and between Saudi Arabia and Yemen’s Houthi rebels in the Red Sea in recent days.
Global oil production fell by 1.6mn b/d on the month to 100.1mn b/d in August, with around 10mn b/d of Gulf output still shut in, the IEA said.
Global supply is expected to fall by 5.7mn b/d on the year to 100.7mn b/d in 2026, with the supply forecast 1.3mn b/d lower than in last month’s report. Production is forecast to rebound by 8mn b/d in 2027.
It forecasts global oil demand will fall by 2.5mn b/d to 102.5mn b/d in 2026, a decline around 940,000 b/d steeper than projected in the previous report, before recovering by 2.6mn b/d in 2027.
Demand losses will be concentrated in middle distillates and petrochemical feedstocks, particularly in Asia. The IEA said disruptions to refined product exports from the Mideast Gulf and Russia had severely constrained diesel and gasoil availability and driven prices sharply higher.
Global refinery throughputs reached a summer peak of 81.4mn b/d in August, up by 960,000 b/d on the month but still 4.2mn b/d below year-earlier levels, the IEA said. “Refining margins reached record levels in the Atlantic Basin in August, led by sharply higher diesel cracks, while surging freight rates weighed on Singapore profitability,” it said.
