IEA cuts 2026 oil supply and demand forecasts as Hormuz disruption drags on

The International Energy Agency (IEA) cut its forecasts for global oil supply and demand again in its monthly Oil Market Report, published on 11 September 2026. The agency said a full recovery in flows from Middle East producers has been pushed back to 2027, because talks between the United States and Iran have stalled and attacks on shipping have resumed.

Key numbers from the report

The IEA said supply would be about 6% lower than in 2025. In its August update it had expected a fall of about 4%.

"Stretched to the limit"

The agency said oil inventories have so far helped keep the market balanced. However, it warned that with buffers shrinking and the global refining system stretched to the limit, progress towards ending the conflicts in the Middle East and between Russia and Ukraine is needed to avoid more tightening and further demand destruction. Exports of diesel and gasoil from Gulf countries in August were just over a quarter of their pre-war levels.

CNBC reported that on 11 September, Brent crude futures for November delivery were trading at $104.44 a barrel, down 3% on the day.

What it means for India

• India imports most of the crude oil it uses, so higher prices raise the import bill and can put pressure on the rupee.
• Fuel and energy costs have pushed up inflation. Retail inflation rose to 4.82% in August, which is part of why economists expect the RBI to raise interest rates at its October meeting.
• Disruption around the Strait of Hormuz affects supplies of crude, LPG and fertiliser from the Gulf, a region India relies on heavily.

The IEA's next monthly report is due in October.