Egypt's Information and Decision Support Center at the Council of Ministers has reviewed the International Energy Agency's (IEA) report on oil market developments. The report, titled "Oil Market Report - September 2026," highlights global oil market trends and the impact of supply disruptions on market balances. The review comes as part of the Egyptian government's efforts to monitor global economic developments and their impact on energy markets. The report notes that the ongoing conflict between the US and Iran has delayed the return of oil flows to normal levels.
The IEA report forecasts a decline in global oil demand for 2026 by 2.5 million barrels per day. This decrease is mainly attributed to the transportation sector and petrochemical industries, particularly in Asian markets. The report also notes that global oil production declined by 1.6 million barrels per day in August 2026 compared to the previous month, reaching 100.1 million barrels per day. This decline is largely due to the continued halt of over 10 million barrels per day of oil production in the Arab Gulf region.
The report expects the global supply to decrease by 5.7 million barrels per day in 2026, reaching 100.7 million barrels per day, with a full recovery in supplies expected in 2027. The disruptions in supplies have also affected global refining activity, with refineries processing 81.4 million barrels per day of oil in August 2026. This represents a decline of 4.2 million barrels per day compared to the same period last year. The report also notes that refining capacity expectations for 2026 have been lowered by 2.6 million barrels per day.
The report highlights a significant decline in global oil inventories in August 2026, with a further reduction of 95 million barrels. This brings the total decline since February 2026 to 507 million barrels, with an average daily decline of 2.8 million barrels. The decline is mainly attributed to lower inventories in non-OECD countries, particularly China, despite higher commercial inventories in OECD countries.
The report notes a significant increase in benchmark oil prices, with the average price of Brent crude rising by $7.61 per barrel in August to $91 per barrel. The price further increased to $113.48 per barrel on September 9. The report attributes this rise to escalating security risks and supply disruptions in the Middle East and Russia.
The report also highlights increased pressure in refined product markets, particularly diesel, which accounts for around 30% of global oil demand. Diesel prices in the US exceeded $200 per barrel in early September, representing a 94% increase from pre-war levels. Similar price increases were recorded in Europe and Asia due to supply shortages.
The report concludes that it is essential to monitor global oil market developments amid the impact of geopolitical tensions on supplies, demand, and prices. The ongoing tensions may lead to further market pressures, emphasizing the need for solutions to restore energy flows and stabilize the global market.
Key points
- The International Energy Agency forecasts a decline in global oil demand for 2026 by 2.5 million barrels per day.
- Global oil production declined by 1.6 million barrels per day in August 2026 compared to the previous month.
- The report highlights increased pressure in refined product markets, particularly diesel, which accounts for around 30% of global oil demand.
