Global oil supply will fall by 4.3 million barrels per day, or around 4%, this year, the International Energy Agency said, as renewed hostilities in the Middle East disrupt supplies and plunge the world deeper into an oil-market deficit.
The U.S.-Iran ceasefire broke down last month, around a month after the parties signed a memorandum of understanding to end the war. Since then, tanker attacks in the Strait of Hormuz have resumed, and the conflict spread as Yemen's Iran-aligned Houthi rebels launched attacks in the Red Sea.
"Global oil supply has fallen well below demand due to the Strait of Hormuz shutdown, the U.S. blockade of Iranian exports, attacks within the Bab el-Mandeb Strait and reduced Kazakh CPC Blend exports," the IEA, which advises industrialised countries, said in a monthly report, referring also to drone attacks in the Black Sea affecting exports.
This year's expected supply drop compares with the 3.7 million bpd forecast in the IEA's July report, and will take total supply to the Paris-based agency's lowest forecast yet for this year at 102.02 million bpd.
That would put global supply around 1.27 million bpd below demand this year, widening from an 860,000 bpd deficit implied by the IEA's July forecasts.
