The International Energy Agency (IEA) believes that once Middle Eastern oil production and exports normalize after the Hormuz disruption, global supply growth will significantly outpace demand growth, leading to a major oil surplus in 2027 and potentially putting downward pressure on oil prices.
The IEA forecasts that in 2027 global oil supply will increase by 8 million bpd, while demand grows by only 2 million bpd, creating a large oversupply.
For 2026, the IEA expects global oil supply to decline by 3.9 million bpd, mainly because Middle East production losses outweigh gains elsewhere.
The IEA estimates the market will still face a supply deficit in 2026, but by 2027 it could swing to a surplus of about 5 million bpd. A large surplus could help countries rebuild depleted oil inventories and strategic reserves.