The International Energy Agency (IEA) has released its Oil Market Report for November 2026, highlighting oil supply, demand, inventories, prices and refining activity.
World oil demand is forecast to fall by 2.7 mb/d in 2026 to 102.3 mb/d, then rebouncing by 2 mb/d in 2027. LPG/ethane and naphtha will account for around 80% of next year’s increase due to supply chains normalising, while transport fuels will see ‘very modest gain’.
Global oil supply rose by a further 2.3 mb/d to 105.4 mb/d in October, following an increase of 3 mb/d in September. After declining 4.8 mb/d in 2026, oil supply is expected to rebound by 6.6 mb/d to reach an average of 108.1 mb/d in 2027.
Margins weakened in October due to ‘record freight costs hit[ting] Asian refiners’, but observed oil inventories rebounded by 52 mb in the same month.
In its report, the IEA says: ‘The oil market is showing tentative signs of rebalancing, with global oil supplies surpassing demand for the first time since the outbreak of the war in Iran. Observed oil inventories rose by 52 mb, or 1.7 mb/d, in October as Gulf exports recovered much faster than global oil demand. North Sea Dated crude oil prices plunged by more than 30% from a high of $136/bbl (€123/bbl) on 8 October to around $93/bbl (€84/bbl) at the time of writing but remained $22/bbl (€20/bbl) above pre-war levels… For now, the severe tightness in product supply, especially for diesel, remains the overriding concern of the broader market and consumers. Persistent attacks on Russian energy infrastructure continue to choke off the country’s diesel supplies to international markets, adding to losses from the Middle East. At the same time, Atlantic Basin refineries, particularly in the US, are running hard to capture high margins, while improved crude availability in Asia and fresh Chinese product export quotas could support higher refinery throughput rates in the region. Notably, the accelerated release of IEA emergency diesel stocks over the coming months will provide a critical bridge across the supply gap until the global refinery system and product output recover.’
