Global oil market heading back to surplus as Gulf exports recover, IEA says

• The agency outlined plans to release 71 million remaining barrels from member countries' emergency stocks.
• OPEC+ crude output reached 41.23 million bpd in Oct.

The global oil market is set to return to a supply surplus in the fourth quarter of this year as Middle East exports rebound faster than worldwide demand despite ongoing attacks on maritime shipping, the International Energy Agency (IEA) said on Friday.

In its monthly oil market report, the Paris-based energy watchdog projected that global oil supply will average 105 million barrels per day (bpd) in the fourth quarter, exceeding forecast demand by 1.7 million bpd and reversing its earlier projection of a fourth-quarter supply deficit.

"The oil market is showing tentative signs of rebalancing, with global oil supplies surpassing demand for the first time since the outbreak of the war in Iran," the agency stated.

The IEA also provided further details on remaining volumes from the record emergency reserve release pledged by member states in March. According to the agency, 71 million barrels will be made available by the end of February, including 15 million barrels of diesel, to help relieve persistent tightness in fuel markets.

The projected surplus follows signs that Gulf oil producers are steadily restoring export flows disrupted since the war began in late February. Shippers have increasingly relied on operational workarounds, including "dark crossings" through the Strait of Hormuz, in which tankers switch off their tracking transponders to evade attacks.

Supporting the recovery figures, OPEC reported on Wednesday that the OPEC+ alliance, comprising the Organization of the Petroleum Exporting Countries and allies including Russia, pumped 41.23 million bpd of crude in Oct.

That figure represents an increase of roughly 2.04 million bpd from September and brings collective production back to 97% of pre-war February volumes.