Global oil supply tops demand in October for first time since Iran war

Brent crude fell to $89.66 this week after Trump said war was “effectively over”

Global oil supply ran ahead of demand in October for the first time since the start of the US-Israeli war against Iran, the International Energy Agency has said. Supplies outstripped demand by almost 2 million barrels a day during the month, the Paris-based agency reported, as “Gulf exports recovered much faster than global oil demand”. The IEA described the market as “showing tentative signs of rebalancing, with global oil supplies surpassing demand for the first time since the outbreak of the war in Iran”.

The surplus is expected to persist through the end of the year. The agency sees global oil supply averaging 105 million barrels a day in the final three months of 2026, 1.7 million barrels a day higher than forecast demand — a reversal of its previous expectation of a deficit in the fourth quarter.

October’s swing back to surplus follows months of disruption to the global oil market, during which the Middle East conflict blocked shipments via the strait of Hormuz, through which a fifth of the world’s oil and gas supply normally passes.

Supply has also recovered on the producers’ side. The Opec+ oil cartel said this week that it had pumped 41 million barrels a day of crude in October, up from about 2 million in September and at 97% of its prewar volumes.

On the demand side, the IEA reported that global oil consumption is expected to fall by 2.68 million barrels a day this year to 103.2 million a day. Consumption is forecast to rebound next year but to remain below 2025 levels, with growth coming mostly in petrochemical feed stocks as the market for vehicle fuel is hit by “high prices, electrification and fuel efficiency”.

The recovery in supply has also taken pressure off emergency stockpiles, which the Iran conflict diminished. The IEA said its member states would speed up the release of remaining emergency oil stocks pledged earlier this year, adding a further 71 million barrels to the market by the end of February. Those stocks are held in refineries, oil terminals, power stations and at offshore fields in the North Sea.

Prices have moved sharply over the course of the conflict. Brent crude, the international benchmark, traded at about $72 a barrel in February, before the conflict began, and reached $126 a barrel by the end of April. This week the benchmark fell to its lowest level since late August, at $89.66, after the US president, Donald Trump, told reporters that the war with Iran was “effectively over”. Brent was trading at about $95 a barrel on Friday.

Supply risks have not disappeared. Concerns persist around continued attacks on oil tankers in the Middle East, and this week reports emerged that senior Iranian officials believe the US could be planning further military strikes.