The International Energy Agency (IEA) says the ongoing conflict in the Middle East has caused what it describes as the largest disruption to global oil supply in history.
In its March oil market report, the agency said shipments of crude oil and refined products through the Strait of Hormuz have dropped sharply. Flows that previously averaged about 20 million barrels per day (bpd) before the war have now reduced to almost nothing.
Because of the disruption, the IEA said Gulf producers have cut their oil output significantly.
“The war in the Middle East is creating the largest supply disruption in the history of the global oil market,” the agency said.
“With crude and oil product flows through the Strait of Hormuz plunging from around 20 mb/d before the war to a trickle currently, limited capacity available to bypass the crucial waterway, and storage filling up, Gulf countries have cut total oil production by at least 10 mb/d.
“In the absence of a rapid resumption of shipping flows, supply losses are set to increase.”
The agency added that global oil supply is expected to decline by about 8 million bpd in March. However, the drop could be partly offset by increased output from countries outside the OPEC+ alliance.
“While the extent of losses will depend on the duration of the conflict and disruptions to flows, we estimate global oil supply to rise by 1.1 mb/d in 2026 on average, with non-OPEC+ producers accounting for the entire increase,” the IEA said.
The conflict is also affecting the global market for refined petroleum products.
“The conflict is also having a significant impact on global product markets, with export flows through the Strait at a near standstill. Gulf producers exported 3.3 mb/d of refined products and 1.5 mb/d of LPG in 2025.
“More than 3 million bpd of refining capacity in the region has already shut due to attacks and a lack of viable export outlets. Runs elsewhere will be increasingly limited due to feedstock availability.”
To address the disruption, IEA member countries agreed on March 11 to release oil from emergency reserves.
The agency said members would make about 400 million barrels available to the market to stabilise supply.
“Global observed oil stocks were 8 210 mb in January, their highest level since February 2021. The OECD accounted for 50%, Chinese crude stocks 15%, oil on water 25%, with the remainder in other non-OECD countries,” the report said.
Meanwhile, global crude prices rose to about $100 per barrel on Thursday after attacks on oil tankers in the Gulf raised fears that the conflict could escalate further.