Global Oil Supply to Decline by 3.7mbpd by 2026

The International Energy Agency (IEA) forecasts a decline in global oil supply by 3.7 million barrels per day (mbpd) in 2026, down from a projected 3.9 mbpd in 2025. The IEA's latest monthly oil market report indicates that total world oil supply will average 860,000 barrels per day below demand in 2026, an improvement from a previous estimate of a 920,000 bpd shortfall.

The agency outlines an optimistic scenario assuming normal conditions in the Strait of Hormuz, projecting a global oil supply increase of 7.5 mbpd, with demand expected to grow by around 2.0 mbpd. However, escalating hostilities in the region could disrupt transit and tighten the global oil balance.

The report also notes a sharp rebound in global oil supply in June, rising by 4.1 mbpd as tanker traffic resumed. Despite this, worldwide production remains 9.4 mbpd below pre-war levels.

Additionally, Nigeria has become the first member of the Organization of the Petroleum Exporting Countries (OPEC) to join the IEA, marking a significant step in Nigeria's strategic role in the global energy market.