Middle East war deepens 2026 oil deficit outlook, but 2027 glut still looms

The conflict in the Middle East has deepened forecasts of a global oil deficit in 2026, according to a Reuters poll of analysts, but recovering Gulf flows, robust US production and weaker demand from China are expected to tip the market into an oversupply in 2027. The Iran war has choked crude production and exports out of the Gulf, prompting analysts to cut their near-term supply forecasts and reverse course on previous expectations of a glut this year. Eight analysts polled by Reuters see an average deficit of 1.5-million barrels per day in 2026, roughly double the 750 000 barrels a day deficit forecast in a similar poll in April. In contrast, prior to the Iran war, analysts expected a 1.63-million barrels a day surplus for 2026.

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