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Informist, Thursday, Mar. 12, 2026

 

--IEA says global oil supply to plunge by 8 mln bpd in March 

--CONTEXT: International Energy Agency releases monthly oil report for March 

--IEA: West Asia conflict creating largest supply disruption in history 

--IEA cuts 2026 global oil demand growth view to 640,000 bpd from 850,000 bpd

 

MUMBAI – The International Energy Agency has slashed its forecast for growth in global oil demand and supply this year in view of the continuing military conflict in West Asia. The Paris-based intergovernmental organisation said the hostilities are creating the largest supply disruption in the history of the global oil market.

 

IEA now expects global oil demand to rise by 640,000 barrels per day in 2026, down 210,000 barrels per day from its earlier forecast of 850,000 barrels per day, it said in its monthly oil market report for March. The agency expects global oil supply to grow by 1.1 million barrels per day this year on average, significantly lower than its previous estimate of a rise of 2.4 million barrels per day.

 

Nations outside the Organization of the Petroleum Exporting Countries will account for the entire increase in supply this year, it said. Higher oil prices due to the war in West Asia and a deteriorating economic outlook have begun to erode demand across the product spectrum, the agency said.

 

Countries in the Persian Gulf region have cut total crude oil production by at least 10 million barrels per day, as crude and oil product flows through the Strait of Hormuz have reduced to "a trickle currently" from around 20 million barrels per day before Israel and the US attacked Iran, sparking the conflict. There is limited capacity available to bypass the crucial waterway and storages are filling up, the agency said. "In the absence of a rapid resumption of shipping flows, supply losses are set to increase," it added.

 

Global oil supply is projected to plunge by 8 million barrels per day in March, with curtailments in West Asia partly offset by higher output from non-OPEC producers. Major supply reductions are seen in Iraq, Qatar, Kuwait, the United Arab Emirates, and Saudi Arabia. IEA member countries Wednesday unanimously agreed to release 400 million barrels of oil from their emergency reserves to offset the supply disruptions stemming from the conflict in West Asia.

 

The conflict is also having a significant impact on global oil product markets, with export flows through the Strait at a near standstill. Persian Gulf producers exported 3.3 million barrels per day of refined oil products and 1.5 million barrels per day of liquefied petroleum gas in 2025. "More than 3 mb/d (million barrels per day) of refining capacity in the region has already shut due to attacks and a lack of viable export outlets. Runs elsewhere will be increasingly limited due to feedstock availability," it said.

 

Consumer countries have significant amounts of oil in storage to bridge temporary supply losses, the agency said. Global observed inventories of crude oil and products are currently estimated at over 8.2 billion barrels, the highest level since February 2021. "Roughly half of these are held in OECD (Organisation for Economic Cooperation and Development) countries, of which 1.25 billion barrels (are held) by governments for emergency purposes, with a further 600 million barrels of industry stocks held under government obligation," it said.

 

"Oil prices have gyrated wildly since the United States and Israel launched joint air strikes on Iran on 28 February," IEA said. Brent crude oil futures soared close to $120 per barrel before easing. At 1531 IST, the price of Brent Crude futures on the Intercontinental Exchange was 5.3% higher at $96.78 per barrel. The price of West Texas Intermediate Crude futures on NYMEX was 4.9% higher at $91.56 per barrel.

 

IEA's coordinated emergency stock release provides a "significant and welcome buffer", but in the absence of a swift resolution to the conflict, it remains a stop-gap measure, the agency said. "The ultimate impact on oil and gas markets and the broader economy from the conflict will depend not only on the intensity of military attacks and any damage to energy assets, but also, crucially, on the duration of disruptions to shipping through the Strait of Hormuz."  End

 

US$1 = INR 92.19

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Ashutosh Pati

Edited by Rajeev Pai

 

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