The IEA Finds A Fragile, Waterborne Crude Surplus

David Blackmon · Nov 14, 2026 · 4 min read

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The IEA Finds A Fragile, Waterborne Crude Surplus

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The International Energy Agency (IEA) says the oil market has finally turned the corner. In its November Oil Market Report released Friday, the IEA projects that global supply will exceed demand during the fourth quarter for the first time since the Iran Conflict began, by 1.7 million barrels per day.

IEA’s report comes the same week in which Saudi Arabia confirmed a new strike on the East-West pipeline it uses to move crude around the Strait of Hormuz. A fire broke out in the Medina region, and officials said operations were not affected. Three days later, Yemen’s Houthis claimed a drone strike on Pumping Station No. 7 of that line and a ballistic missile strike on an oil facility at the Red Sea port of Yanbu. Riyadh had not confirmed those Thursday claims as of this writing. Obviously, the durability of the surplus remains an iffy proposition.

Global supply rose another 2.3 million barrels a day in October, to 105.4 million, following a 3 million bpd jump in September. Gulf exports excluding Oman reached 18.4 million bpd, roughly 74% of pre-war levels. Observed inventories rose by 52 million barrels, the first such increase since June. But oil on the water surged by 86 million barrels, meaning stocks on land kept falling. IEA says on-land inventories “remain at their lowest level since at least 2016,” and that observed global stocks have dropped by a cumulative 462 million barrels since the war began at the first of March.

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Meanwhile, European diesel is still near $180 per barrel, 77 percent higher than pre-war levels. There’s no “transition” in that — just two wars damaging refineries and generally mucking up supply chains. In the United States, the Energy Information Administration’s weekly report showed distillate inventories at 103.3 million barrels, the lowest reading for this week of the year since the weekly reports began in 1982. EIA’s latest survey puts diesel at $6.13 a gallon, $2.29 higher than a year ago. Regular gasoline, though well down from last month, was still 94 cents higher than last year.

There is no transition happening here, and the real fixes have not changed: End the wars in Ukraine and Iran and build more refining capacity so consumers are not held hostage to the next Houthi hit on a Saudi pipeline half a world away. Until these things happen, it’s best to treat the IEA’s new-found surplus as what it really is: A highly speculative proposition based on oil on water, much of it in a war zone, and one attack away from vanishing altogether.

David Blackmon is an energy writer and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.

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