The key facts

  • Global oil supply in October reached 105.4 million barrels per day, exceeding demand for the first time since the start of the war in Iran
  • North Sea Dated fell 32% — from a peak of $136 to about $93 per barrel, European diesel dropped 11%, to nearly $180 per barrel
  • The IEA calls the diesel shortage 'the main problem of the market': diesel exports from Russia are disrupted by attacks on infrastructure

Supply outpaces demand for the first time

Global oil supply has exceeded demand for the first time since the start of the war in Iran, according to the monthly report of the International Energy Agency (IEA) published on Friday. In September, supply rose by 3 million barrels per day, and in October by another 2.3 million, reaching 105.4 million barrels per day. 'The oil market is showing cautious signs of rebalancing,' the agency said. The IEA expects supply to exceed demand in the fourth quarter as well, but warns that ongoing attacks on maritime shipping could derail the recovery.

Prices are falling, but diesel is still expensive

The increase in supply on the market has already been reflected in prices: North Sea Dated crude fell 32% — from the October peak of $136 per barrel to about $93 at the time the report was prepared. European diesel prices over the same period fell 11%, to nearly $180 per barrel, but remain 77% above the pre-war level. At the same time, diesel prices have been falling noticeably more slowly than oil — the gap reflects the persisting shortage of this particular type of fuel.

Diesel shortage is the market's main problem

The IEA called the shortage of diesel fuel 'the main problem of the market.' Attacks on Russian energy infrastructure continue to disrupt diesel exports from the country, exacerbating supply losses in the Middle East. The agency believes that a faster release of emergency diesel stocks in the coming months would help compensate for the shortage while refinery operations are being restored.

Gulf exports are recovering unevenly

Despite ongoing attacks on tankers, oil exports from Persian Gulf countries (excluding Oman) reached 18.4 million barrels per day in October — still 26% below the pre-war level. The recovery has been led by crude oil, while exports of refined products and liquefied petroleum gas remain at roughly half of pre-war volumes — which is directly linked to the diesel shortage in Europe.

Demand forecast

The IEA forecasts a decline in global oil demand this year of 2.7 million barrels per day, to 102.3 million — due to high fuel prices and disruptions to Gulf exports. The agency expects demand to recover in 2027, but only with a slight increase in motor fuel consumption: more and more drivers are switching to electric vehicles, and cars are becoming more fuel-efficient.