Middle East Oil Supplies Disrupted, Global Stocks Continue to Decline

However, flows decreased again following Houthi attacks in the Red Sea. In August 2026, exports via these routes fell to 5.5 million bpd.

The IEA reports that the increased flows through alternative routes have compensated for more than 500 million barrels or about 2.8 million bpd of lost supply from the Strait of Hormuz since the conflict began.

Market pressure rose again after attacks on Saudi Arabia’s East-West pipeline — which transports oil to Yanbu — forced its shutdown in early September.

Meanwhile, oil exports through the Strait of Hormuz have shown signs of improvement thanks to U.S. military support facilitating transit through the contested waterway.

Yet, the IEA notes that oil flows through the Strait remain below pre-war levels.

Production outside the region climbs

Supply shortages from the Gulf have also been partly offset by higher output from producers outside the region.

The IEA records a cumulative supply increase of 420 million barrels, or about 2.3 million bpd, from non-Gulf countries since the war began.

From February to August 2026, the largest production gains came from the U.S. ( 520,000 bpd), Brazil ( 470,000 bpd), Kazakhstan ( 440,000 bpd), Venezuela ( 300,000 bpd), and Nigeria ( 200,000 bpd).

During the same period, global biofuel supplies also rose seasonally by 890,000 bpd.

This production growth has been an important factor helping markets absorb Gulf supply losses.

Global oil demand declines

Adjustments have not only occurred on the supply side but also in demand.

The IEA estimates that global oil demand over the past six months averaged 5.8 million bpd lower than in February 2026. Cumulatively, this reduction equals more than one billion barrels.

China accounts for the largest drop in demand.

China’s oil demand, based on implied consumption over the past six months, was 1.7 million bpd lower than in February 2026 and 1.1 million bpd below the same period the previous year.

This decline is also visible in China’s crude oil imports by sea, which fell from 11.5 million bpd in February to 6 million bpd in June 2026.

Lower Chinese imports have eased pressure on other crude-importing countries in Asia.

Demand reduction has also occurred in other markets. In the Middle East, petrochemical and aviation activities have been curtailed.