Crisis in the Global Oil Market: As Inventories Melt Away, Diesel Suffers the Most
According to the International Energy Agency's September 2026 report, production losses in the Middle East and Brent crude surpassing $113 have caused a major squeeze in the markets, while global inventories have dropped by 507 million barrels.
The International Energy Agency's September 2026 Oil Market Report revealed a major squeeze in global energy markets due to production losses in the Middle East and a deadlock in US-Iran negotiations. While Brent crude prices exceeded $113, it was reported that the biggest crunch was seen in diesel and global inventories melted by 507 million barrels.
Massive Loss in Global Supply
The decline in oil production became pronounced in August, causing global supply to drop by 1.6 million barrels per day compared to the previous month, falling to 100.1 million barrels.
While the disabling of over 10 million barrels per day of production in the Gulf region due to security risks increased supply pressure, global supply is expected to decline to an average of 100.7 million barrels per day throughout 2026.
Brent Crude Surpasses $113
While the impact of supply disruptions on prices was severe, the average price of North Sea Dated Brent crude rose to $91 per barrel in August and climbed as high as $113.48 on September 9.
As OPEC+ group's total production fell from 34.57 million barrels per day in July to 33.11 million barrels in August, it was noted that Saudi Arabia, Russia, Kuwait, and Iraq remained below their targets.
Pressure on Refined Products and Diesel
Drawing attention to the fact that price pressure is experienced in refined products rather than crude oil, the report stated that diesel and gasoil prices in the US exceeded $200 per barrel at the beginning of September.
Total net exports of diesel and gasoil from Gulf countries and Russia in August were 1.6 million barrels per day lower compared to February.
Inventories Melting Rapidly
Global observed oil inventories, which have cushioned the impact of supply disruptions until now, decreased by 95 million barrels in August alone.
Since the beginning of the war, the total inventory loss reached 507 million barrels, corresponding to an average daily drawdown of 2.8 million barrels.
Demand Shock and IEA Warnings
The IEA noted that the expected decline of 2.5 million barrels per day in global oil demand in 2026 can be compared to the largest demand shocks of the last 60 years.
Emphasizing that the market has become more vulnerable due to diminishing inventories and the refining system approaching its capacity limits, the agency drew attention to the importance of easing geopolitical tensions.