Global Oil Market Volatile in 2026 as IEA Lowers Production Outlook
Jakarta — The International Energy Agency’s latest Oil Market Report (OMR) from March 2026 highlights significant pressure on the global oil market due to geopolitical conflict in the Middle East.
Major supply disruptions, revised projections for production growth, and strategic reserve releases have become key factors shaping energy market dynamics throughout the year.
The OMR is the IEA’s monthly publication containing comprehensive analysis of global oil supply, demand, inventories, prices, and refining activities.
The IEA has noted in its March 2026 report that the Middle Eastern conflict has triggered the largest oil supply disruption in the history of the modern energy market.
As a result, the forecast for global oil supply growth in 2026 has been significantly downgraded.
According to the latest estimate cited from Reuters, world oil supply is projected to grow by only around 1.1 million barrels per day (bpd) throughout the year.
This projection cut coincides with production and distribution disruptions across several major producer nations, particularly in the Gulf region. The conflict is hampering shipments through the Strait of Hormuz, a vital corridor for approximately one-fifth of global oil trade.
This has caused a sharp decline in global output in the near term.
The IEA estimates that world oil production in March has fallen by around 8 million bpd, reflecting the direct impact of export restrictions and operational disruptions in several major producer nations.
Although there is significant near-term disruption, the IEA believes the global oil market still has the potential to record an overall supply surplus in 2026.
In its projection, the IEA states that global supply is expected to remain higher than demand, with a surplus of around 2.46 million bpd, though this figure is down compared to the previous month’s estimate of 3.73 million bpd.
This surplus reflects a structural trend in recent years, in which production capacity growth, particularly outside OPEC+, still exceeds global consumption growth.