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Global oil markets are suffering “the largest supply disruption in history” as the war in Iran drives production to the lowest level in four years, the International Energy Agency said in a report on Thursday.
Gulf producers had cut oil production by at least 10mn barrels a day because the Strait of Hormuz was almost impassable to shipping, it said. The IEA expects world output to fall by 8mn b/d in March as a result. This represents a decline of more than 7 per cent from the roughly 107mn b/d produced in February.
“The war in the Middle East is creating the largest supply disruption in the history of the global oil market,” the IEA report said.
Big supply reductions have been seen in Iraq, Qatar, Kuwait, the UAE and Saudi Arabia, but declining production in the Gulf would be partly offset by increased output from Kazakhstan and Russia and by non-OPEC+ producers, said the IEA.
Saudi Arabia and the UAE are rerouting some of their exports through ports outside the Gulf. Saudi Arabia hit a record daily level of exports through its western ports of 5.9mn b/d on March 9, said the IEA. In 2025, flows through this route were just 1.7mn b/d.
Abu Dhabi National Oil Co loaded an average of 2.4mn b/d from the port of Fujairah between March 4 and March 9, said the IEA. The port is connected to an oil pipeline from Adnoc’s production hub in Habshan and the 42mn-barrel Al-Mandous crude storage cavern.
The severity of the impact on global supplies would depend on the duration of the conflict, the IEA said, but it estimates that global oil supply will rise by 1.1mn b/d on average in 2026. This is a much lower forecast than the IEA issued a month ago, when it said global supply was on track to increase by 2.4mn b/d this year.