Global oil supply overtakes demand for first time since Iran war

Global oil supplies surpassed demand in October for the first time since the war in Iran began, the International Energy Agency said on Friday in its monthly report. European diesel prices, meanwhile, remain 77 percent above pre-war levels.

The Paris-based agency called diesel shortages the market's "overriding concern." Despite continued attacks on tankers, Gulf oil exports excluding Oman reached 18.4 million barrels a day in October — a recovery led by crude, but still 26 percent below pre-war levels. Exports of refined products and liquefied petroleum gas remain at roughly half their pre-war volumes. Attacks on Russian energy infrastructure continue to disrupt Russian diesel exports, compounding the losses from the Middle East.

Global supply rose by 3 million barrels a day in September and a further 2.3 million in October, reaching 105.4 million barrels a day, and the IEA expects supply to exceed demand through the fourth quarter. Demand is forecast to fall by 2.7 million barrels a day this year, to 102.3 million — high fuel prices and disrupted Gulf exports are themselves suppressing consumption. The agency expects demand to recover in 2027, with only a small rise in road fuel use as more drivers switch to electric cars and engines grow more efficient.

The IEA suggested releasing emergency diesel stocks faster over the coming months to cover the shortfall while refinery output recovers, and warned that continued attacks on shipping could yet disrupt the rebalancing.

North Sea Dated crude has fallen 32 percent from its early-October peak of 136 dollars a barrel, to about 93 dollars. European diesel has fallen 11 percent — to nearly 180 dollars a barrel.