Global oil inventories are being drawn down at a record pace as restricted tanker traffic through the Strait of Hormuz continues to disrupt Middle East oil flows, according to the International Energy Agency’s May 2026 Oil Market Report.
The IEA said world oil demand is now forecast to contract by 420,000 barrels per day in 2026, falling to 104 million barrels per day. That is 1.3 million barrels per day below the agency’s pre-war forecast
Global oil supply fell by another 1.8 million barrels per day in April to 95.1 million barrels per day, the agency said. Total supply losses since February have reached 12.8 million barrels per day.
Output from Gulf countries affected by the closure of the Strait of Hormuz stood 14.4 million barrels per day below pre-war levels, according to the report. The IEA said cumulative supply losses from Gulf producers have already exceeded 1 billion barrels.
The agency said observed global oil inventories, including oil on water, fell by 250 million barrels over March and April, equal to about 4 million barrels per day. Preliminary data showed inventories drew by 129 million barrels in March and another 117 million barrels in April.
Oil prices have moved sharply during the disruption. The IEA said North Sea Dated crude fell from a high of $144 per barrel to below $100 before rebounding. At the time of the report, it was trading around $110 per barrel.
The report assumes flows through the Strait of Hormuz gradually resume from June. Even under that assumption, the IEA said supply is likely to recover more slowly than demand, keeping the market in deficit until the final quarter of 2026.
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