HighVI Energy Politics & Supply Security14 October 2026, Wednesday
IEA sees Gulf flows recovering as global stock deficit hits 509m barrels
In its monthly report on 14 October, the International Energy Agency said Gulf crude exports rose by 4.4 million barrels a day in September to 13.9 million. The same report puts global observed stocks at the end of September 509 million barrels below pre-war levels.
According to the IEA's October Oil Market Report, total oil flows through the Strait of Hormuz rose by 3.7 million barrels a day in September to 10.9 million, driven by ship-to-ship transfers in the Gulf of Oman. Exports bypassing the strait increased by 970,000 barrels a day to 5.6 million. Gulf crude exports exceeded 75% of pre-war levels, but Middle East refined product exports stand at 1.9 million barrels a day, against 4.7 million before the war. Global supply rose by 2.5 million barrels a day month on month in September, to 102.3 million.
The buffer keeps eroding even as flows recover. According to the report, global observed stocks fell by 10 million barrels in September: onshore stocks dropped by 113 million barrels while oil on water rose by 103 million. According to The National, onshore stocks are at their lowest since at least 2016, and the agency expects the diesel shortage to last into the second half of 2027. The physical benchmark, North Sea Dated, averaged $116.89 in September and was trading around $134 as the report was written.
On the demand side, the agency expects global demand in 2026 to fall by 2.6 million barrels a day year on year to 102.4 million, with diesel accounting for 25% of the decline. For 2027 it forecasts demand growth of 2 million barrels a day and supply growth of 7.7 million. According to The National, the agency stresses that this supply recovery depends on the Gulf remaining stable; in the report's own words, fresh attacks in the Gulf leave the recovery fragile.
Talay assessment
Bottom line
Flows and stocks are moving in opposite directions: Gulf exports topped 75% of pre-war levels in September while the global stock deficit reached 509 million barrels. Physical Dated trading around $134, far above futures, shows scarcity concentrated in the prompt month. The binding constraint is no longer the barrels crossing the strait but the absence of a surplus to rebuild stocks.
Likely effects
- Diesel and middle distillatesNegative1–6 months
Middle East product exports are below half their pre-war level and the diesel deficit stretches into the second half of 2027; diesel prices stay elevated and decoupled from crude.
- Crude curveNegativeWeeks
Dated at around $134, well above futures, shows prompt scarcity being priced in the physical market; the curve stays in steep backwardation.
- TürkiyeNegative1–6 months
The refined product and diesel deficit lifts pump prices and the energy import bill faster than crude in Türkiye, which depends on diesel imports.
Possibilities, ranked
- 1Flows hold, stock gap stays open55%
Gulf exports remain in a 13–15 million barrel band, but stocks keep falling in the fourth quarter.
Watch: The stock change in the IEA's mid-November Oil Market Report
- 2Attacks knock flows back30%
Attacks in Hormuz and the Red Sea pull exports back below 12 million barrels, and stock depletion accelerates.
Watch: JMIC transit counts and Kpler Gulf export data
- 3Recovery starts refilling stocks15%
Attacks subside, Gulf flows approach pre-war levels and observed stocks begin to rise.
Watch: Observed stocks turning higher in the IEA's monthly report
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Market reaction
Indicators affected
- Gulf crude exports (Sept)▲ 13.9m b/d
- Global stocks vs pre-war▼ −509m barrels