IEA: Hormuz Crisis Triggers Historic Oil Supply Shock

Gulf producers have already cut output by at least 10 million bpd, with the IEA projecting a global supply plunge of approximately 8 million bpd in March. This includes an estimated 7.9 million bpd of crude and 9.9 million bpd of total liquids potentially shut in across Gulf producers.

The conflict also severely impacts refined product markets, with over 3 million bpd of regional refining capacity halted. In response, IEA member countries unanimously agreed to release 400 million barrels from emergency reserves to stabilize markets.

Despite this, oil prices have surged, with Brent crude topping $100. Concurrently, the IEA revised its 2026 global oil demand growth outlook lower by 210,000 bpd to 650,000 bpd, citing seasonal weakness, a modest economic backdrop, and conflict-related disruptions like flight cancellations.

While global supply saw a modest rise in February, driven by OPEC and non-OPEC producers, the immediate and short-term outlook is dominated by the unprecedented supply shock and demand uncertainties.