LONDON - The oil market will move into a significant supply surplus in 2027 after recovering from the closure of the Strait of Hormuz, the International Energy Agency (IEA) said in its monthly oil market report on Wednesday.
The US has announced an interim agreement to end the Iran war, which includes Iran reopening the strait and the US lifting its naval blockade of Iran, potentially bringing an end to the largest oil supply disruption in history.
The war is estimated to have blocked more than 14-million barrels per day (bpd) of Middle East oil output, according to the IEA.
"If the deal holds, exports and production from the Gulf should see a gradual recovery – not least because Iranian oil exports can fully resume once the US blockade is lifted," the agency said.
The oil market will then fall into a significant supply overhang next year, the IEA said in its first look at 2027, as oil supply is set to surge by eight-million bpd while demand rises by just two-million bpd.
