Global oil supplies outstripped demand by nearly 2 million barrels a day in October, according to the International Energy Agency, marking the first market surplus since the outbreak of the war in Iran.
The Paris-based agency reported that supplies surpassed demand as Gulf exports recovered much faster than global oil consumption. That shift helped push international prices down from their April peaks.
Brent crude traded at $95 a barrel on Friday, down from a high of $126 a barrel in April, The Guardian reported. Prices fell this week to their lowest level since late August at $89.66 after the US president, Donald Trump, told reporters that the war with Iran was effectively over.
Market analysts note that the recovery remains uneven across different petroleum products. While crude oil shipments from the Gulf have rebounded strongly, refined products lag behind.
BREAKING: The global oil market swung into a surplus in October thanks to "lofty" lofty Persian Gulf exports "despite ongoing attacks on energy infrastructure and tanker", according to the @IEA. But — and this is crucial — "the severe tightness in product supply, especially…”
Gulf crude recovery
Middle Eastern crude exports, including pipeline shipments, have recovered to about 80% to 85% of pre-war levels. Refined-product exports remain stuck at around 35% to 40%.
“Oil infrastructure such as refineries remains susceptible to drone strikes,” said Xavier Tang, senior market analyst for Vortexa, explaining why Gulf producers prioritize crude shipments.
Fereidun Fesharaki, chairman emeritus of industry consultant FGE NexantECA, also highlighted the disparity between crude and refined products. Refined-product shipments remain muted as the Strait of Hormuz chokepoint stays vulnerable.
Global oil supplies surged by 2.3 million barrels a day to 105.4 million barrels a day in October, following a similar increase in September. The Oil & Gas Journal said that output has risen by 5.3 million barrels a day since August.
Emergency stock releases
To bridge the supply gap, the International Energy Agency announced that its members will accelerate the release of remaining emergency oil stockpiles. The move will add emergency oil stockpiles to the market by the end of February.
These emergency stocks are held in refineries, oil terminals, power stations, and offshore fields in the North Sea. The accelerated release aims to ease pressure on diminished reserves while global refinery systems recover.
Meanwhile, crude output reached 97% of pre-war volumes, according to figures cited by The Guardian.
Despite the broader supply rebound, European diesel prices remain elevated at close to $180 a barrel, about 77% above pre-war levels. Continued attacks on Russian energy infrastructure have further constrained diesel supplies to international markets.
Common market questions
When did the oil market surplus return?
The International Energy Agency reported that global oil supplies exceeded demand by nearly 2 million barrels a day in October, the first surplus since the war in Iran began.
How much have oil prices dropped?
North Sea Dated crude prices plunged by more than 30% from an early-October high of $136 a barrel to around $93 a barrel by mid-November, though they remained $22 a barrel above pre-war levels.
What is the projection for oil supply in 2027?
The International Energy Agency projects that global supply will recover by 6.6 million barrels a day to reach 108.1 million barrels a day next year, driven by increases in Gulf production and output from the Americas Quintet.
Why are refined product prices still high?
Refined-product exports from the Gulf remain at roughly 35% to 40% of pre-war levels because refineries remain susceptible to drone strikes, while continuous attacks on Russian energy infrastructure choke off diesel supplies.
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