LONDON, Nov 13 - The global oil market is expected to see a surplus in the fourth quarter of this year. According to the International Energy Agency (IEA), this surplus is due to a faster recovery in Middle East oil exports compared to the overall demand for oil, even though there are still attacks on shipping in the region.
The IEA provided more details on the expected volumes from the unprecedented release of oil from its members' emergency reserves, which was announced in March. By the end of February, 71 million barrels will be available, including 15 million barrels of diesel to help ease market tightness.
Oil supply is anticipated to average 105 million barrels per day in the fourth quarter, which is 1.7 million barrels per day higher than the estimated demand. Previously, the IEA had predicted a supply deficit for this quarter.
“The oil market is showing early signs of rebalancing, with global oil supplies now exceeding demand for the first time since the war in Iran began,” the report stated.
Following the release of the IEA report at 0900 GMT, oil prices, including Brent crude, saw a slight decline, dropping 0.1% to $95.71 a barrel.
This report aligns with signs that Gulf oil producers are recovering their exports, which had been affected since the war started in late February. They are utilizing methods like "dark crossings" through the Strait of Hormuz, where tankers turn off their tracking signals to avoid attacks.
In October, the OPEC+ group, which includes OPEC and allies such as Russia, produced 41.23 million barrels per day, an increase of about 2.04 million barrels per day from September, reaching 97% of the output level before the war.
OTHER ANALYSTS SEE SIGNS OF SURPLUS
Other analysts have also predicted a return to a surplus supply, despite ongoing issues with the war in Iran and continuous attacks on tankers in the Gulf. Last week, JPMorgan forecasted a global surplus of 1.4 million barrels per day for October.
High oil prices have reduced demand this year, contributing to the shift towards a surplus. The IEA forecasts that global oil demand will drop by 2.7 million barrels per day in 2026 to 102.3 million barrels per day, before increasing again by 2 million barrels per day in 2027, which is similar to previous forecasts.
In addition to increased output from OPEC+, the IEA noted that production outside of the group is also on the rise.
Production from the United States, Canada, Brazil, Argentina, and Guyana is projected to increase by 1.6 million barrels per day this year. By 2027, global supply is expected to go up by 6.6 million barrels per day, reaching 108.1 million barrels per day, largely due to a recovery in Gulf production.
However, the growth forecast for supply in 2027 is down by 1.1 million barrels per day compared to last month’s report. The lower outlook partially reflects a downward revision for Iran, which is facing a US blockade limiting its oil exports.
For 2027, the IEA estimates the supply surplus to be around 3.8 million barrels per day, slightly less than the 3.94 million barrels per day surplus predicted last month.