What does the IEA project for global oil supply and demand balance in 2027 following the reopening of the Strait of Hormuz?

The IEA projects that the global oil market will enter a 'significant supply overhang' in 2027, with global oil supply set to surge by 8 million barrels per day (bpd) while demand rises by just 2 million bpd — resulting in a net surplus of 6 million bpd. This outlook is contingent on the U.S.–Iran agreement holding, which would allow Iranian oil exports to fully resume and enable a gradual recovery of Gulf production and exports after the three-month closure of the Strait of Hormuz, the largest oil supply disruption in history, which shut in over 14 million bpd of Middle East oil output.

According to the IEA, what are the key conditions and implications of the U.S.–Iran agreement for global oil markets?

The key condition is that the U.S.–Iran agreement holds, ending their three-month war and leading to Iran reopening the Strait of Hormuz and the U.S. lifting its naval blockade. This would allow Iranian oil exports to fully resume and trigger a gradual recovery of Gulf exports and production. The IEA states this recovery could provide 'a welcome respite to the market and an opportunity to replenish depleted inventories, or to build new strategic reserves', as countries reassess energy strategies in response to the crisis.

IEA sees gradual Hormuz recovery tipping into significant 2027 surplus

Jun 17, 2026

The IEA forecasts a gradual global oil market recovery following a US-Iran agreement to reopen the Strait of Hormuz, predicting a significant supply surplus by 2027. Supply is set to surge by 8 million barrels per day against a 2 million barrel daily demand increase.

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