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Global oil supply outpaced demand in October for first time since Iran war began
The International Energy Agency says global oil supply exceeded demand in October for the first time since the war against Iran began, with supplies outstripping consumption by almost two million barrels a day. The shift matters because conflict-related disruption through the Strait of Hormuz had tightened supply and driven up energy prices; the IEA now sees tentative signs that the market is rebalancing.
The agency expects supply to average 105 million barrels a day in the final quarter of the year, 1.7 million above forecast demand, reversing its previous expectation of a deficit. Opec+ production reached 41 million barrels a day in October, around 97% of prewar levels, while the IEA expects demand to fall by 2.68 million barrels a day this year to 103.2 million. Brent crude, which reached $126 a barrel in April, was trading at about $95 on Friday; IEA members are also due to release a further 71 million barrels from emergency stocks by the end of February.
In short
- Oil supply exceeded demand by almost two million barrels a day in October.
- The IEA expects a fourth-quarter surplus, reversing its earlier forecast.
- Emergency stock releases will add 71 million barrels by February.
Explained simply
The International Energy Agency (IEA) tracks oil production and use around the world. Opec+ is a group of oil-producing countries, including Opec members and partners such as Russia, that coordinates production decisions.
The Strait of Hormuz is a narrow sea route linking the Gulf to global shipping lanes, and a large share of the world’s oil exports passes through it. Disruption there can restrict deliveries and affect oil prices, which in turn influence transport, heating and the cost of goods.
Governments hold emergency oil stocks to help deal with serious supply disruptions. Changes in supply and demand, alongside the release of those stocks, can affect how quickly markets adjust and what households and businesses pay for energy.
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Originally published by The Guardian as “Global oil supply returns to surplus for first time since start of Iran war, says IEA”.