The International Energy Agency (IEA), in its June Oil Market Report, said that a proposed US-Iran peace agreement could pave the way for the reopening of the Strait of Hormuz and the resumption of Iranian oil exports, easing concerns over global energy supplies. The prospect of a breakthrough in Middle East tensions has already pushed oil prices to their lowest levels since early March, with Brent crude trading near $81 per barrel.

Despite improving supply prospects, the IEA expects global oil demand to decline by 1.1 million barrels per day in 2026, following a sharp drop in second-quarter consumption amid elevated fuel prices and prolonged supply disruptions. Global oil supply is projected to fall by 3.9 million barrels per day to 102.4 million barrels per day this year, although non-OPEC+ producers and strategic petroleum reserve releases have helped offset part of the disruption.

The agency noted that global oil inventories continue to decline at a record pace, with observed stocks falling by 3.8 million barrels per day on average since the conflict began. Looking ahead, the IEA forecasts a strong supply rebound in 2027, with global production expected to rise by around 8 million barrels per day to 110 million barrels per day, significantly outpacing demand growth of 2 million barrels per day and potentially creating a sizeable market surplus.

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