14.4 Million Barrels Per Day Shut In, Brent Averaging $117 In April, Global Inventories Drawing At Record Speed. The IEA Has Never Written A Report Quite Like This One
This extensive analysis driven article was compiled with the help of the following source(s): IEA Oil Market Report (OMR).
The International Energy Agency (IEA) does not use dramatic language lightly. In its May 2026 Oil Market Report, it describes what is happening to global energy markets as the largest supply disruption in the history of the global oil market. The numbers behind that description are extraordinary.
With Hormuz tanker traffic still restricted, cumulative supply losses from Gulf producers already exceed one billion barrels, with more than 14 million barrels per day now shut in. To put that in context, global oil demand before the crisis averaged approximately 105 million barrels per day. The world is now missing nearly 14 percent of its normal supply, and the gap has not yet peaked.
World oil demand is forecast to contract by 420,000 barrels per day year-on-year in 2026, to 104 million barrels per day, which is 1.3 million barrels per day less than the IEA’s pre-war forecast. The sharpest decline falls in the second quarter, where demand drops by 2.45 million barrels per day, with the petrochemical and aviation sectors absorbing the most immediate damage.
Global oil supply declined by a further 1.8 million barrels per day in April to 95.1 million barrels per day, taking total losses since February to 12.8 million barrels per day. Output from Gulf countries affected by the closure of the Strait of Hormuz was 14.4 million barrels per day below pre-war levels.
According to the EIA’s Short-Term Energy Outlook published May 12, the Brent crude oil spot price averaged $117 per barrel in April, $46 per barrel higher than the average in February, and the highest monthly average since June 2022. Daily Brent spot prices reached as high as $138 per barrel on April 7.
The world has not simply absorbed this loss passively. Three mechanisms are partially cushioning the blow. First, Saudi Arabia and the UAE have successfully redirected some exports to terminals loading outside of the Strait, while observed global inventories, including oil on water, were drawn down by 250 million barrels over March and April, or four million barrels per day.
Second, Atlantic Basin crude oil exports, now heading primarily to hard-hit East of Suez markets, have increased by 3.5 million barrels per day since February, with notable gains from the United States, Brazil, Canada, Kazakhstan and Venezuela.
Third, IEA member countries took a crucial step on March 11 by making 400 million barrels of oil from their emergency reserves available to the market, the largest stock release in IEA history.
But these measures have limits. Chinese seaborne crude imports fell by a massive 3.6 million barrels per day from February to April. Major reductions in imports were also seen in Japan, down 1.9 million barrels per day, Korea, down one million barrels per day and India, down 760,000 barrels per day.
The disruption of transit via the Strait of Hormuz has reduced LNG supplies from Qatar and the United Arab Emirates by over 300 million cubic metres per day since March 1, translating into a loss of over two billion cubic metres of gas supply every week. The Ras Laffan facility in Qatar, the largest liquefaction facility in the world, has been offline since it was first attacked on March 2.
The IEA’s base case assumes that flows through the Strait gradually resume from June, but even in that scenario, global oil supply is projected to decline by 3.9 million barrels per day on average in 2026, to 102.2 million barrels per day, and the oil market remains in deficit until the final quarter of the year.
Analysts expect the market to remain undersupplied until late 2026 unless a political agreement allows the gradual reopening of the Strait of Hormuz and restoration of regional oil flows.
The IEA Executive Director has described the combined impacts as the greatest threat to global energy security in history. The May report does not contradict that assessment. It quantifies it.
One billion barrels gone. Strategic reserves draining. Brent at $117. And the world is hoping a diplomatic conversation in Beijing will change the numbers. Like this finance oriented article. Read our previous article here.
