The International Energy Agency (IEA) warns of a significant oil surplus in 2027. This forecast depends on the successful implementation of the U.S.-Iran peace agreement. The deal aims to reopen the Strait of Hormuz to restore Middle Eastern oil flows to global markets.
Brent and WTI crude prices fell to multi-month lows following the announcement. The IEA June report projects global oil supply will surge by 8 million barrels per day (bpd) in 2027. Global demand is expected to increase by only 2 million bpd in the same year.
This projected glut reverses the supply crunch experienced during the recent conflict. The IEA expects a gradual recovery due to operational challenges like demining shipping lanes.