Oil Prices Rise Again as Middle East Conflict Tightens Global Supply
Global: Benchmark oil prices have resumed an upward trend as renewed hostilities in the Middle East have further disrupted regional oil exports, despite earlier easing from April peaks following IEA emergency stock releases, bypass routes around the Strait of Hormuz, higher non-Gulf production and weaker global demand. Oil flows through the Strait averaged 7.6 million barrels per day (mb/d) in August, 13.1 mb/d below pre-war levels, with cumulative export losses nearing 2.8 billion barrels, while bypass routes offset more than 500 million barrels (2.8 mb/d) before attacks reduced flows. Global oil demand averaged 5.8 mb/d below February levels over the past six months, including a 1.7 mb/d decline in China, while second-quarter 2026 demand fell 5.3 mb/d year-on-year and full-year demand is now expected to contract by 2.5 mb/d, with the Middle East and Asia accounting for 80% of the decline. Meanwhile, global oil inventories have fallen by 507 million barrels since the start of the war, including more than 300 million barrels released from IEA emergency stocks, raising concerns over tightening supply buffers if Gulf exports remain constrained.
Source: IEA
