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Oil Market Flips to Surplus as Exports Surge
13 Nov
Summary
- Global oil market to see a surplus in Q4 2026.
- Middle East exports recovering faster than demand.
- IEA forecasts 1.7 million bpd supply increase.
The global oil market is anticipated to shift into a surplus during the fourth quarter of 2026, reversing previous forecasts of a deficit. The International Energy Agency (IEA) reported that oil supply is expected to average 105 million barrels per day, surpassing demand by 1.7 million barrels per day. This rebalancing is occurring as Middle Eastern exports recover robustly, utilizing alternative shipping routes to circumvent disruptions.
OPEC+ crude production in October saw a significant increase of approximately 2.04 million barrels per day compared to September, nearing pre-conflict levels. Analysts, including JPMorgan, also foresee an excess supply. High oil prices have contributed to moderating demand, further aiding the surplus.
Supply growth is also expected from non-OPEC+ countries, with significant increases projected from the United States, Canada, Brazil, Argentina, and Guyana. While a downward revision to Iran's output forecast exists due to US sanctions, the IEA still projects a substantial global supply surplus of about 3.8 million barrels per day by 2027.
