Global oil supply jumped by 2.3 million barrels a day in October to 105.4 million, largely as Gulf exports recovered, and the IEA now expects a surplus in the fourth quarter of 2026 that could widen significantly next year.

Shipments through the Strait of Hormuz resumed after months of disruption, helping Gulf exports rebound faster than demand; the waterway normally carries about a fifth of the world’s oil and gas.

Even so, Gulf state oil exports, excluding Oman, were 18.4 million barrels a day last month—still 26% below prewar levels amid continuing tanker attacks.

Production growth in the United States, Canada, Brazil and Argentina is partly compensating for losses in the Middle East and Russia.

Oil prices fell about 18% during the month as supply recovered and signs that President Donald Trump might avoid renewed military action in Iran eased market concerns.

North Sea Dated crude dropped 32%, from $136 a barrel in early October to about $93, while European diesel fell 11% to around $180 a barrel; both remained well above prewar prices.

The broader supply picture remains tight for refined products, especially diesel, as lost Persian Gulf exports and Ukrainian attacks on Russian energy infrastructure constrain supplies; high prices and disrupted Gulf shipments of refined products and liquefied petroleum gas are also weighing on demand.

Refinery operations fell by 1.3 million barrels a day in October to 81.3 million, their lowest seasonal level, but are expected to recover to 84.7 million by December 2026.

To help bridge the refined-product gap, the IEA plans to accelerate emergency diesel-reserve releases, while Atlantic-region refineries—particularly in the United States—are running at high capacity to capitalize on elevated margins.

IEA members also plan to release another 71 million barrels from emergency stockpiles by the end of February; the IEA’s earlier plan to release a record 400 million barrels of crude has not yet been fully implemented.

The IEA warned that further attacks on tankers and shipping routes could jeopardize the recovery, while stronger Gulf exports could improve crude availability for India, which relies heavily on imports.