IEA warns global oil refining system ‘stretched to the limit’ as Iran, Ukraine wars tighten market
The energy agency warned shrinking inventories and strained refineries could further tighten markets.
TL;DR
- The global oil refining system is under significant pressure due to the Iran and Ukraine wars.
- The IEA has lowered its global oil supply and demand forecasts for the rest of the year.
- A full recovery in Middle East oil flows has been postponed to next year.
- World oil supply is expected to decline by 5.7 million barrels per day (bpd) in 2026, a greater drop than previously forecast.
- Global oil demand is predicted to fall by 2.5 million bpd this year, exceeding earlier predictions.
- Inventories have been crucial in market balancing, but buffers are shrinking.
- The IEA stresses the need for progress in resolving Middle East conflicts and the Russia-Ukraine war to avoid market tightening.
- Oil prices have surged, with major benchmarks potentially exceeding $100 per barrel.