The International Energy Agency has warned oil stockpiles are rapidly depleting, increasing the urgency around reopening the Strait of Hormuz.
In a new report, the IEA said observed stocks had fallen below 7.9 billion barrels for the first time since April 2025. The agency noted that 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 has increased, as previously available inventory buffers are rapidly depleting.
Market volatility and supply forecasts
The report, released this morning, updates the market after benchmark crude prices surged to two-month highs in July, following the breakdown of the Iran-US ceasefire agreement, which reversed the recovery in oil supplies from the Gulf. This left oil trading in an “unusually wide range”, swinging from around $105 to $70 through the month, “driven by sudden diplomatic pivots on the conflict”, the IEA said.
The global energy watchdog has now slashed its global supply forecasts. With an agreement enabling the reopening of Hormuz and unhindered transit through the Bab el-Mandeb Strait still elusive, the IEA has again lowered supply estimates for the rest of the year. Global oil supply is now forecast to fall by 4.3 mb/d in 2026, to 102 mb/d, as growth of 1.4 mb/d from the Americas only partly offsets losses in the Middle East and Russia.
