How Iran war could impact oil markets in 2027
The International Energy Agency forecasts global oil supply will exceed demand by 4.62 million barrels per day in 2027.
The oil market is expected to swing from a shortage this year to a surplus in 2027, but a prolonged Iran war could derail that outlook and trigger supply shortages, the International Energy Agency warned Friday.
What happened: Since the US-Israel-Iran war began on Feb. 28, attacks on commercial vessels have nearly halted traffic through the Strait of Hormuz, disrupting flows of up to 14 million barrels per day, the IEA said in its latest monthly update. The waterway normally carries about a fifth of global oil and liquefied natural gas shipments.
The agency forecasts that global oil supply will exceed demand by 4.62 million barrels per day in 2027, reversing an expected 860,000 bpd shortage this year. However, the outlook depends on shipping through the Strait of Hormuz returning to normal after the renewed conflict.
Supply is projected to rise by 7.5 million bpd next year after falling 3.7 million bpd in 2026, while demand is expected to fall by 1 million bpd this year before recovering by 2 million bpd in 2027.
