IEA projects global oil market surplus of 8 million bpd by 2027

The International Energy Agency expects a large global oil supply surplus to build by 2027 as the market recovers from the disruption caused by the closure of the Strait of Hormuz. In its monthly oil market report, the IEA said a temporary agreement between the United States and Iran to reopen the strait and lift the US blockade of Iranian ports would allow Gulf oil flows to resume gradually. The agency reported that the recent war halted more than 14 million barrels per day of oil production across the Middle East, and that Iranian crude exports would restart in full once US sanctions are removed. Its first estimates for 2027 indicate global supply could rise by about 8 million barrels per day, while demand growth is projected not to exceed 2 million barrels per day. The IEA noted that oil flows through the Strait of Hormuz began increasing at the start of June, with ship-to-ship transfers in the Gulf of Oman lifting Middle East total supply to 12 million barrels per day, up from 9.6 million in May. The agency said stabilization in the Gulf and a return of Iranian exports to normal levels would be the two key factors in restoring balance to global markets.