Oil Market Report - August 2026 (IEA)

Summary

• World oil demand is forecast to decline by 1.6 mb/d in 2026, 510 kb/d more than last month's estimate.p.1
• Global oil demand is projected to expand by 2.4 mb/d in 2027.p.1
• Global oil supply rose by 2.4 mb/d to 101.5 mb/d in July, with 8.3 mb/d of Gulf output still shut in.p.1
• Global oil supply is projected to decline by 4.3 mb/d on average in 2026 and rebound by 8.3 mb/d next year to 110.3 mb/d.p.1
• Refinery crude throughputs reached 80.9 mb/d in July and are forecast to decline by 2.5 mb/d on average in 2026.p.1
• Global observed oil inventories plunged by 69 mb in July.p.1

Key insights

1. Prices spiked as high as $105/bbl on 23 July, with North Sea Dated trading around $92/bbl at the time of writing.p.4
2. Gulf oil production rose by a further 2.5 mb/d in July to 23.9 mb/d, still 8.3 mb/d below pre-war levels.p.4
3. May's demand decline of 5.8 mb/d year-on-year is likely to have been the nadir.p.7
4. Annual decreases of 1.9% for gasoil and 2.6% for naphtha are roughly double the rate for gasoline and LPG/ethane.p.7
5. The deficit in the oil balance is set to peak near 600 mb in late 4Q26 if the recovery gets back on track.p.5
6. China is adding about 128 mb of crude storage in late 2026.p.6