International Energy Agency Forecasts Continued Global Oil Supply Shortages Until 2027

The International Energy Agency (IEA) confirmed Friday that global oil supply and demand will decline more sharply this year than previously anticipated. The agency, part of the OECD, attributed this to delayed resolution of the US-Iranian conflict, pushing normal Middle East flows beyond 2027 and raising fuel prices. Based on new estimates, a 2.5 million barrels per day (bpd) year-on-year supply drop is now expected, significantly revising its August forecast of a 1.6 million bpd decrease. Its monthly report stressed that "inventories have, until now, played a crucial role in balancing the market." The agency, which advises industrial nations, warned: "With strategic stockpiles dwindling and global refining capacity at its maximum, progress in resolving the Middle East conflict and the five-year-old Russo-Ukrainian War is more critical than ever to avert worsening market supply shortages."