--- title: "IEA Warns: Q3 Crude Oil Supply Gap Expected to Double, Annual Deficit May Hit Five-Year High" type: "News" locale: "en" url: "https://longbridge.com/en/news/295647744.md" description: "Conflict in the Middle East has severely tightened global oil supplies. IEA data shows the market currently faces a daily shortfall of approximately 1.8 million barrels, with global inventories having decreased by 410 million barrels. Although high oil prices have suppressed demand, the contraction in supply is even greater. Approximately 8.3 million barrels per day of production capacity in the Persian Gulf remain offline, and supply recovery may be delayed until 2027" datetime: "2026-08-12T10:15:22.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/295647744.md) - [en](https://longbridge.com/en/news/295647744.md) - [zh-HK](https://longbridge.com/zh-HK/news/295647744.md) --- # IEA Warns: Q3 Crude Oil Supply Gap Expected to Double, Annual Deficit May Hit Five-Year High The resurgence of conflict in the Middle East is accelerating the impact on global oil supplies. Although high oil prices have significantly dampened demand, the contraction on the supply side far exceeds the decline in demand, leading to a faster depletion of global oil inventories. The latest monthly report from the International Energy Agency (IEA) indicates that, affected by the reignition of hostilities in the Middle East and disruptions to maritime transport, **the global oil market currently faces a supply gap of approximately 1.8 million barrels per day. The IEA has doubled its forecast for the third-quarter oil supply gap, expecting the full-year 2026 deficit to reach its highest level in five years.** Since the outbreak of the conflict, observed global oil inventories have decreased by 410 million barrels, with a drop of 69 million barrels in July alone. Meanwhile, **the IEA has raised its forecast for the decline in global oil demand in 2026 by 510,000 barrels per day to 1.6 million barrels per day,** **meaning that global oil demand this year will see its largest annual decline since 2020.** However, even with demand suppressed by high oil prices, supply losses continue to put pressure on inventories. ## 8.3 Million Barrels Per Day of Capacity Still Offline in the Persian Gulf IEA data shows that global oil supply increased by 2.4 million barrels per day month-on-month in July, but remains 6.3 million barrels per day lower than the same period last year. **Currently, approximately 8.3 million barrels per day of oil production in the Persian Gulf region remains shut down, and hindered maritime transport continues to drag on supply recovery.** Among major oil-producing countries, Saudi Arabia's oil supply increased by 900,000 barrels per day to 8.2 million barrels per day in July; Iraq increased by 470,000 barrels per day to 2.9 million barrels per day; Iran increased by 330,000 barrels per day to 2.6 million barrels per day; and Kuwait increased by 290,000 barrels per day to 1.8 million barrels per day. In contrast, the UAE's production dropped to 3.9 million barrels per day due to attacks on regional shipping. U.S. Energy Secretary Chris Wright stated on Tuesday that approximately 9 million barrels of oil were successfully exported per day over the past week, close to half of pre-war levels. Saudi Arabia and the UAE have also diverted flows through alternative pipelines, while a tanker relay transport network has formed in the Strait of Hormuz, alleviating the impact of disrupted normal shipping to some extent. ## Inventories Down by 410 Million Barrels, Buffer Space Rapidly Narrowing **The rate of inventory depletion is becoming one of the biggest risks in the oil market.** IEA data shows that since the outbreak of the conflict, observed global oil inventories have decreased by 410 million barrels, with a single-month decrease of 69 million barrels in July. The IEA previously expected the market to return to oversupply around the end of this year. However, with inventories falling rapidly, the market's buffer space has narrowed significantly. The agency warned that although supply and demand are expected to loosen again in the future, the urgency of reopening the Strait of Hormuz has risen substantially. Regarding emergency reserves, IEA member countries such as the United States, Japan, and Germany announced record strategic petroleum reserve release plans in March this year. These inventories will need to be gradually replenished when market conditions allow. ## Supply Recovery May Be Delayed Until 2027 The refining sector is also impacted. IEA data shows that global refinery throughput rebounded in July but remains nearly 5 million barrels per day lower than the same period last year. Global refinery crude processing is expected to decrease by an average of 2.5 million barrels per day in 2026, with a potential rebound of 3.5 million barrels per day in 2027. From a supply and demand perspective, the IEA expects global oil demand to grow by 2.4 million barrels per day in 2027, while global oil supply is expected to rise by 8.3 million barrels per day. **Global oil demand in the fourth quarter is expected to increase by 580,000 barrels per day year-on-year, implying that as supply recovers, the oil market may eventually shift back to oversupply.** However, before the situation in the Strait of Hormuz is fully clarified, the global oil market still faces significant supply risks. **The IEA expects that as the market returns to oversupply, the heavily depleted global oil inventories are likely to be replenished next year, but any new supply disruptions could further push up oil prices and market volatility.** ### Related Stocks - [USOI.US](https://longbridge.com/en/quote/USOI.US.md) - [BNO.US](https://longbridge.com/en/quote/BNO.US.md) - [USO.US](https://longbridge.com/en/quote/USO.US.md) - [UCO.US](https://longbridge.com/en/quote/UCO.US.md) - [SCO.US](https://longbridge.com/en/quote/SCO.US.md) - [XLE.US](https://longbridge.com/en/quote/XLE.US.md) - [VDE.US](https://longbridge.com/en/quote/VDE.US.md) - [IXC.US](https://longbridge.com/en/quote/IXC.US.md) - [XOP.US](https://longbridge.com/en/quote/XOP.US.md) - [IEO.US](https://longbridge.com/en/quote/IEO.US.md) - [IEZ.US](https://longbridge.com/en/quote/IEZ.US.md) - [OIH.US](https://longbridge.com/en/quote/OIH.US.md) - [XES.US](https://longbridge.com/en/quote/XES.US.md) - [PXJ.US](https://longbridge.com/en/quote/PXJ.US.md) - [CRAK.US](https://longbridge.com/en/quote/CRAK.US.md) - [ERX.US](https://longbridge.com/en/quote/ERX.US.md) - [ERY.US](https://longbridge.com/en/quote/ERY.US.md) - [DUG.US](https://longbridge.com/en/quote/DUG.US.md) - [MLPA.US](https://longbridge.com/en/quote/MLPA.US.md) - [03097.HK](https://longbridge.com/en/quote/03097.HK.md) - [03175.HK](https://longbridge.com/en/quote/03175.HK.md) ## Related News & Research - [Saudi Red Sea oil exports go dark as Houthi attack threat grows](https://longbridge.com/en/news/295664494.md) - [Oil rises as doubts over US-Iran deal heighten supply concerns](https://longbridge.com/en/news/295595527.md) - [The Hormuz Shock Is Far From Over](https://longbridge.com/en/news/295522842.md) - [W.Africa Crude - India snaps up WAF](https://longbridge.com/en/news/294988087.md) - [Asia Distillates-Spot premiums little changed, timespreads pare strength](https://longbridge.com/en/news/295515512.md)