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IEA: Global Oil Supply to Fall by Around 3.9 Million bpd this Year

The IEA slashed its previous forecast, which had projected a 1.5 million bpd drop in global oil supply (X)
The IEA slashed its previous forecast, which had projected a 1.5 million bpd drop in global oil supply (X)
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IEA: Global Oil Supply to Fall by Around 3.9 Million bpd this Year

The IEA slashed its previous forecast, which had projected a 1.5 million bpd drop in global oil supply (X)
The IEA slashed its previous forecast, which had projected a 1.5 million bpd drop in global oil supply (X)

Global oil supply will not meet total demand this year as the Iran war wreaks havoc on Middle East oil production, the International Energy Agency said in its monthly oil market report on Wednesday.

The US and Israel's war with Iran, subsequent damage to Iran and its Gulf neighbors' oil infrastructure and the effective closure of the Strait of Hormuz have caused the largest oil supply crisis in history, sending oil prices skyrocketing.

"With Hormuz tanker traffic still restricted, cumulative supply losses from Middle East Gulf producers already exceed 1 billion barrels with more than 14 million (barrels per day) of oil now shut in, ⁠an unprecedented supply ⁠shock," said the agency, which advises industrialized countries.

The IEA forecasts imply that supply will come in 1.78 million bpd below total demand in 2026, erasing a 410,000 bpd surplus projected in last month's report and a close to 4 million bpd surplus in its December report.

"Our latest supply and demand estimates imply that the market will remain severely undersupplied through the end of 3Q26, even assuming the conflict ends by early June," the Paris-based agency said, adding that the ⁠second-quarter deficit will be as stark as 6 million bpd.

The IEA's base-case forecast is for a gradual resumption of traffic through the strait from the third quarter onwards, it said, which could see the market return to a "modest surplus" by the fourth quarter, allowing depleted stocks to begin to rebuild.

Supply losses led to a 246 million barrel drawdown in global oil inventories in March and April, Reuters quoted the IEA as saying, which could increase price volatility ahead of the peak summer demand period.

The 32-member IEA coordinated the largest-ever release of 400 million barrels of oil from strategic reserves in March in a bid to calm markets. It said around 164 million barrels of that total has already been released.

Overall global oil supply will fall by around 3.9 million barrels per day ⁠across 2026 due to ⁠the war, the agency said, slashing its previous forecast, which had projected a 1.5 million bpd drop.

The IEA now sees demand falling by 420,000 bpd this year, compared to a previous forecast of an 80,000 bpd drop.

Consumption is also under pressure due to the war as price spikes lead to demand destruction and slower economic growth, it said.

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Business

Riyadh to Host Global Logistics, Supply Chain Forums in November

A view of Riyadh, Saudi Arabia. (SPA)
A view of Riyadh, Saudi Arabia. (SPA)
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Riyadh to Host Global Logistics, Supply Chain Forums in November

A view of Riyadh, Saudi Arabia. (SPA)
A view of Riyadh, Saudi Arabia. (SPA)

Under the patronage of Custodian of the Two Holy Mosques King Salman bin Abdulaziz Al Saud, Saudi Arabia will host the second editions of the Global Logistics Forum (GLF) and the UNCTAD Global Supply Chain Forum (GSCF) in Riyadh from November 29 to December 1, reported the Saudi Press Agency on Tuesday.

The GLF, organized by the Saudi Ministry of Transport and Logistic Services, and the GSCF, hosted in partnership with the United Nations and the Saudi Ports Authority, form a pivotal international platform bringing together global leaders, decision-makers, and experts in transport, supply chains, and international trade.

Aligning with Saudi Vision 2030, the GLF aims to solidify the Kingdom's position as a global logistics hub connecting continents while driving innovation, global connectivity, and sustainable supply chains.

The Ministry of Transport and Logistic Services stressed that the co-located forums will serve as a premier launchpad for strategic initiatives and international partnerships, inviting global specialists to participate.

The inaugural 2024 GLF in Riyadh drew over 13,000 attendees, 140 speakers, and 80 exhibitors from more than 30 countries, resulting in 67 agreements valued at over SAR16 billion ($4.3 billion).

Business

Saudi Arabia Tightens Auto Dealer Obligations to Protect Consumers, Improve Ownership Experience

People are seen at the Riyadh Motor Show. (Riyadh Season)
People are seen at the Riyadh Motor Show. (Riyadh Season)
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Saudi Arabia Tightens Auto Dealer Obligations to Protect Consumers, Improve Ownership Experience

People are seen at the Riyadh Motor Show. (Riyadh Season)
People are seen at the Riyadh Motor Show. (Riyadh Season)

Saudi Arabia’s auto market is moving toward greater discipline and competition as the Ministry of Commerce steps up oversight of dealers, seeking to strengthen consumer protection and improve compliance with after-sales service requirements.

The ministry announced it had suspended an auto dealership, barred it from importing vehicles and fined it SAR 8.12 million ($2.1 million) after recording 175 violations. These included failure to provide spare parts and replacement vehicles to customers during maintenance, as well as other breaches involving consumer rights, the Commercial Agencies Law and its implementing regulations.

The ministry investigated the violations, contacted affected consumers and followed up to ensure they received their rights and due compensation, including replacement vehicles.

It also summoned the manufacturer, oversaw corrective measures and recall campaigns, and began transferring the brand to another dealer after verifying its readiness and ability to provide the necessary services.

Mohammed Al-Farraj, chief asset management officer at Arbah Capital, told Asharq Al-Awsat that Saudi Arabia’s large auto market and sustained demand make it one of the region’s most attractive, supported by population and economic growth, expansion of the non-oil economy and mega-projects, and growth in tourism and logistics.

The availability and variety of financing options play a key role in supporting demand, particularly because cars are a necessity for a large segment of the population rather than a luxury, Al-Farraj noted.

Market performance is influenced by vehicle prices, financing costs, income levels and supply, as well as competition among brands and the quality of after-sales services.

Al-Farraj described the ministry’s tougher oversight as a positive step toward protecting consumers and improving market discipline, stressing that a dealer’s obligations do not end with a sale but extend to warranties, maintenance, spare parts and replacement vehicles when needed.

Stronger after-sales compliance should bolster market confidence and gradually shift competition toward quality and reliability rather than price alone.

Al-Farraj expects intensifying competition to push dealers to focus more on the value offered throughout vehicle ownership, including total cost of ownership and customer service.

Business

Mega-Projects, Investment Flows Draw Bank of Jordan to Saudi Arabia

A group photo of Bank of Jordan officials following the inauguration ceremony for the bank’s first branch in Riyadh. (Asharq Al-Awsat)
A group photo of Bank of Jordan officials following the inauguration ceremony for the bank’s first branch in Riyadh. (Asharq Al-Awsat)
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Mega-Projects, Investment Flows Draw Bank of Jordan to Saudi Arabia

A group photo of Bank of Jordan officials following the inauguration ceremony for the bank’s first branch in Riyadh. (Asharq Al-Awsat)
A group photo of Bank of Jordan officials following the inauguration ceremony for the bank’s first branch in Riyadh. (Asharq Al-Awsat)

Saudi Arabia’s appeal extends beyond rising foreign investment and expanding mega-projects to the banking sector, where institutions see the economic transformation driven by Vision 2030 as an opportunity to establish a long-term presence in one of the region’s fastest-growing markets.

Bank of Jordan Group’s entry into the Kingdom reflects growing interest among regional financial institutions in tapping the country’s expanding investment cycle.

The group opened its first branch in Riyadh on Monday, launching its financial and banking operations in Saudi Arabia. The move underscores the Kingdom’s ability to attract not only capital, but also financial institutions seeking to finance the next phase of investment.

Mega-projects, private sector expansion and growing foreign and domestic investment are creating significant opportunities for banks to provide financing solutions and services to companies and investors. At the same time, Saudi Arabia is seeking to deepen the financial sector’s role as a driver of growth and economic diversification.

Saleh Hammad, general manager of Bank of Jordan Group, told Asharq Al-Awsat that the bank’s strategy is based on a clear view of the economic transformations reshaping Saudi Arabia and the wider region.

The group has pursued carefully considered regional expansion, focusing on markets with sustainable economic fundamentals and strategic importance, with Saudi Arabia at the forefront.

Hammad said the Kingdom is undergoing an unprecedented economic transformation under Vision 2030, fueled by investment growth, private-sector expansion and the development of its financial and banking environment.

Establishing a presence in one of the region’s leading financial and economic hubs strengthens Bank of Jordan’s position as a regional institution capable of supporting trade, development and investment opportunities, he noted.

Hammad also highlighted Saudi Arabia’s strong banking system and evolving regulatory environment, supported by the Saudi Central Bank, as key advantages that enhance the group’s position while creating added value for clients and investors.