The International Energy Agency slashed its forecast for oil supply growth a day after a historic emergency stock release, as the Middle East war chokes flows through one of the world’s most critical oil-transit routes.
A petrol vendor pumps petrol from Iranian fuel oil tankers for resale near the Bashmagh border crossing.
The Paris-based organization, a group of Western nations and their allies, now expects supply to grow by 1.1 million barrels a day this year—a dramatic cut from the 2.4 million barrels a day expected previously. All supply growth is expected to come from outside the OPEC+ alliance as the conflict forces major Gulf producers to curb output.
In March, supply is projected to plunge by 8 million barrels a day to 98.8 million barrels a day, the lowest levels since the first quarter of 2022.
“The war in the Middle East is creating the largest supply disruption in the history of the global oil market,” the IEA said in its closely watched monthly report on Thursday.
The Strait of Hormuz—a vital route handling roughly one-fifth of the world’s oil flows—remains effectively closed, with Iran targeting cargo ships and striking key energy infrastructure in the region. Major producers, including Kuwait and Iraq, have started cutting output, while Saudi Arabia is rerouting flows to alternative channels.
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