On August 12 the International Energy Agency (IEA) issued its Oil Market Report-August 2026 which warned that the third-quarter world oil deficit is expected to be 1.8 million barrels per day—more than double the previously estimated deficit of 800,000 bpd. The report also estimates that global oil consumption will shrink by an additional 2.8 million barrels per day in the third quarter, on top of the second quarter’s drop of consumption by 4.9 million barrels per day. In July global oil consumption was about 6.3 million barrels per day lower than the same period last year. During this crisis many nations have been tapping into their national strategic oil supplies, which are now believed to be at the lowest level since April 2025 at 7.9 billion barrels.
Many of the world’s oil-production and -refining facilities are operating at full capacity, which leads the IEA report to put the blame for the global shortage on the expansion of the Iran War to the wider region, the closure of the Strait of Hormuz, and the threat to shipping in the Red Sea. Saudi Arabia used shipping via the Red Sea as a contingency to bypass Hormuz.
