By Giulia Petroni
The near-closure of the Strait of Hormuz has unleashed an unprecedented supply shock on global energy markets, one that could keep oil supplies constrained for months even after shipping through the vital waterway resumes, the International Energy Agency said.
The Paris-based energy watchdog--a group of Western nations and their allies--now expects global oil demand to contract by 420,000 barrels a day this year, from its previous forecast of an 80,000-barrel-a-day decline, as disrupted tanker traffic and stalled U.S.-Iran negotiations reverberate through the global economy.
The IEA's base-case scenario assumes flows through Hormuz will gradually resume from June, with demand growth returning to positive territory only in August and then hovering around 2025 levels for the remainder of the year.
Supply, however, would recover far more slowly because of infrastructure damage, logistical bottlenecks and the need to clear Iranian mines from the strait before normal export operations can restart.
Even after mines are cleared, it would likely take at least two to three months to fully restore steady export operations as oil tankers exit the Gulf, empty vessels are repositioned and port loading schedules are reorganized, the IEA said.
Oil production and refining activity are also expected to recover more slowly than shipping traffic. Countries with congested ports and limited storage capacity, including Iraq, are likely to take longer to return to prewar export levels, while Saudi Arabia and the United Arab Emirates are expected to restore output more quickly.
As a result, the oil market is set to remain in deficit until the final quarter of the year, the agency said in its closely watched monthly report.
The disruption has hit several fuel categories especially hard, with the sharpest declines seen in liquefied petroleum gas, ethane and naphtha--key feedstocks for the petrochemical industry. Jet fuel demand has also weakened sharply.
With tanker traffic through Hormuz still severely restricted, cumulative supply losses from Gulf producers have already exceeded 1 billion barrels. In April, output from Gulf producers was 14.4 million barrels a day below prewar levels.
The IEA now expects global supply to fall by 3.9 million barrels a day this year, from previous expectations of a 1.5-million-barrel-a-day decline, as roughly one-fifth of the world's oil supply remains trapped in the Persian Gulf.
OPEC+ annual production is projected to plunge by 4.7 million barrels a day due to losses from Gulf producers, while non-OPEC+ output is forecast to rise by 820,000 barrels a day.
Supply growth expectations from producers in the Americas have already been revised up by more than 600,000 barrels a day since the start of the year, to 1.5 million barrels a day on average. Atlantic Basin crude exports, which are increasingly redirected toward energy-starved Asian markets, have risen by 3.5 million barrels a day since February. Russian crude exports have also increased as repeated attacks on domestic refineries curbed local fuel demand and the U.S. temporarily eased sanctions.
In April, production from the OPEC+ alliance fell by 1.9 million barrels a day from the previous month, with OPEC output at its lowest level in more than 35 years, according to the IEA.
In April, production from the countries that make up OPEC+ alliance fell by 1.9 million barrels a day from the previous month to the lowest level in more than 35 years, according to the IEA. The group's spare production capacity dropped to a record low of just 170,000 barrels a day.
Non-OPEC+ supply, by contrast, rose by 90,000 barrels a day from the prior month.
In early European trading on Wednesday, Brent crude was above $106 a barrel, while West Texas Intermediate hovered around $97 a barrel as the U.S.-Iran conflict settled into a gray zone that is neither war nor peace.
Major disagreements remain between Washington and Tehran over the future of the Strait of Hormuz and Iran's nuclear program, keeping negotiations stalled and fueling fears of prolonged supply disruptions.
With global oil inventories already falling at a record pace, the IEA warned that further price volatility appears likely ahead of the peak summer demand season.
Observed global inventories, including oil at sea, were drawn down by 250 million barrels over March and April, the equivalent of 4 million barrels a day. Producers outside of the Middle East also ramped up output and lifted exports to record levels in response to the crisis.
Replenishing depleted stockpiles, including strategic reserves, could require an additional 1 million barrels a day of supply for the next three years on top of underlying demand growth, the IEA said.
Write to Giulia Petroni at giulia.petroni@wsj.com
(END) Dow Jones Newswires
May 13, 2026 04:30 ET (08:30 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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