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Global Oil Stocks Fall Below 7.9 Billion Barrels to Lowest Levels Since April 2025, IEA Says

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The International Energy Agency on Wednesday said global total observed oil stocks have shrunk by 410 million barrels or 2.7 million barrels a day since the beginning of the Iran war to slip below 7.9 billion barrels for the first time since April last year.

In July, global observed oil inventories saw a sharp decline of 69 million barrels or 2.2 mmbbl/d "as renewed disruptions to exports from the Gulf and the Caspian Sea resulted in sharply lower volumes of oil on water," the agency said in its monthly oil report for August published Wednesday.

Global oil markets are now expected to face a 1.8 mmbbl/d deficit in Q3, as against IEA's projections of around 800,000 bbl/d last month.

"Although the market is projected to return to surplus towards the end of this year, risks remain substantial and the urgency of reopening the Strait (of Hormuz) has increased, as previously available inventory buffers are rapidly depleting," the agency said.

For 2026, the IEA now expects global oil demand to fall by 1.6 mmbbl/d, 510,000 bbl/d more than its projection in July, with oil consumption expected to be weighed down by the ongoing disruptions to flows through the crucial Strait of Hormuz waterway and elevated fuel prices.

World demand is, however, projected to rise by 2.4 million mmbbl/d in 2027, with annual contractions expected to ease from 4.9 mmbbl/d in Q2 to 2.8 mmbbl/d in Q3, and return to growth in Q4.

IEA now expects global oil supply to decline by an average 4.3 mmbbl/d in 2026 before bouncing back by 8.3 mmbbl/d next year to 110.3 mmbbl/d.

In July, worldwide supply increased by 2.4 mmbbl/d versus June to 101.5 mmbbl/d but was still 6.3 mmbbl/d below year-ago levels.

Oil production in the Gulf recovered by a further 2.5 mmbbl/d in July to 23.9 mmbbl/d, after rising by 3.7 mmbbl/d in the month prior, but was still 8.3 mmbbl/d below pre-war levels while an agreement to resume flows through the Hormuz Strait and unconstrained transit via the Bab el-Mandeb Strait remained elusive, the agency said.

"Regional exports, including routes bypassing the Strait of Hormuz, fell by a sharp [2.1 mmbbl/d to 15 mmbbl/d] after the key passageway was effectively closed again in early July and oil infrastructure and tankers came under attack," IEA said.

Gulf loadings reached as high as 20 mmbbl/d in early July but fell to around 12 mmbbl/d later in the month, the agency added.

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