The International Energy Agency (IEA) says the war in the Middle East is creating the largest supply disruption in the history of the global oil market.
In its oil market report for March, the agency said crude and oil product shipments through the Strait of Hormuz have fallen sharply, from about 20 million barrels per day (bpd) before the war to only a trickle recently.
As a result, the IEA said Gulf countries have reduced their total oil production by at least 10 million bpd.
“The war in the Middle East is creating the largest supply disruption in the history of the global oil market,” the statement reads.
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“With crude and oil product flows through the Strait of Hormuz plunging from around 20 mb/d before the war to a trickle currently, limited capacity available to bypass the crucial waterway, and storage filling up, Gulf countries have cut total oil production by at least 10 mb/d.
“In the absence of a rapid resumption of shipping flows, supply losses are set to increase.”
The agency said global oil supply is expected to fall by 8 million bpd in March, as production cuts in the Middle East are partly offset by increased output “from non-OPEC+ producers Kazakhstan and Russia following disruptions at the start of the year”.
“While the extent of losses will depend on the duration of the conflict and disruptions to flows, we estimate global oil supply to rise by 1.1 mb/d in 2026 on average, with non-OPEC+ producers accounting for the entire increase,” IEA said.
“The conflict is also having a significant impact on global product markets, with export flows through the Strait at a near standstill. Gulf producers exported 3.3 mb/d of refined products and 1.5 mb/d of LPG in 2025.
“More than 3 million bpd of refining capacity in the region has already shut due to attacks and a lack of viable export outlets. Runs elsewhere will be increasingly limited due to feedstock availability.”
The agency said member countries unanimously agreed on March 11 to make 400 million barrels of oil from their emergency reserves available to the market to address disruptions stemming from the war in the Middle East.
“Global observed oil stocks were 8 210 mb in January, their highest level since February 2021. The OECD accounted for 50%, Chinese crude stocks 15%, oil on water 25%, with the remainder in other non-OECD countries,” IEA said.
Global crude oil price rose to $100 a barrel on Thursday after attacks on oil tankers in the Gulf, which dashed hopes for a near-term de-escalation of the Middle East conflict.
