Inside the IEA’s July Report: Supply Rebounds 4.1 Million Barrels a Day as Gulf Exports Claw Back and the Agency Maps the Road Back to Surplus
Global oil supply rebounded by a sharp 4.1 million barrels a day to 98.8 million barrels a day in June as tanker traffic through the Strait of Hormuz partially resumed, the International Energy Agency said in its July Oil Market Report, offering the most detailed accounting yet of how the market is healing from one of the largest supply disruptions in decades and what remains at risk.
Total Gulf oil exports surged by 6.5 million barrels a day in June to 16.1 million barrels a day, the agency said, still well below the 24 million barrels a day averaged before the war started. With the United States temporarily lifting restrictions on Iranian exports and providing security support for non-Iranian shipments, tankers stuck in the Strait rushed to exit, the agency noted, describing an armada of tankers setting sail for refining hubs.
The demand side is recovering from a deep trough. A recovery in global oil demand from a low of 97.9 million barrels a day in May, a decline of 5.3 million barrels a day year on year, is underway, the report said, with the agency mapping a quarterly path of a 4.8 million barrel a day annual decline in the second quarter, easing to 1.7 million in the third and returning to growth of 1.2 million in the fourth. For full-year 2026 demand still falls by 1 million barrels a day, the first annual decline since 2020, before growing 2 million barrels a day in 2027.
Supply follows the same arc: down an average 3.7 million barrels a day to 102.6 million barrels a day in 2026, then expanding 7.5 million barrels a day next year, conditional on transit recovery. Global observed oil inventories rose 21 million barrels in June, the first build since the outbreak of the war, even as product cracks and refining margins surged to four-year highs with global refinery runs about 6 million barrels a day below year-ago levels.
The agency’s conditionality is explicit. The forecast hinges on the assumption that tanker flows through the Strait will gradually recover, it said, warning that renewed exchanges of fire in the Gulf this week highlight the risks of not reaching a lasting peace agreement, which is a must for the normalisation in oil markets.
Why it matters: For Gulf producers the report quantifies both the damage and the repair: about two-thirds of pre-war export volumes are back, our calculation, inventories have started rebuilding and the agency sees the market swinging back to surplus toward the end of the year if flows keep recovering. The four-year-high refining margins meanwhile explain why product prices remain elevated for the region’s fuel importers even as crude retreats from its peaks.
Outlook: OPEC publishes its own monthly report on Monday, the producer group’s first opportunity to answer the IEA’s demand call. The variables to watch are unchanged: the pace of tanker transits through Hormuz, the durability of the diplomatic track, and whether the June inventory build extends into July.
Table – the IEA’s July numbers:
| Measure | Figure |
|---|---|
| June world supply | 98.8 mb/d, +4.1 m/m |
| June Gulf exports | 16.1 mb/d, +6.5 m/m |
| Pre-war Gulf export average | ~24 mb/d |
| 2026 demand | -1 mb/d, first fall since 2020 |
| 2027 demand | +2 mb/d |
| 2026 supply | 102.6 mb/d, -3.7 |
| 2027 supply | +7.5 mb/d |
| June stock change | +21 mn bbl, first build of the war |
Sources: IEA.
