IEA says oil supply overtook demand in October as US diesel stays high

Global oil supply overtook demand and inventories rose in October, the first time supply has outpaced consumption since the war in Iran began, the International Energy Agency (IEA) said in its monthly Oil Market Report on Friday 13 November. The agency expects the market to return to a surplus in the fourth quarter of 2026, with a larger build in 2027, according to ThePrint's account of the report.

US diesel has not followed crude lower. Truck-stop diesel cost $6.23 a gallon on 9 November, 65% more than a year earlier, FreightWaves reported using its SONAR data. Brent futures were down 21% from their 30 October high by then, while truck-stop diesel had fallen 2.5%. Diesel fuels trucks, trains, farm machinery and construction equipment, so its price feeds into the cost of moving goods well beyond the oil market.

NewsWLD could not retrieve the text of the IEA report itself. The IEA figures below are as reported by ThePrint, which relayed the report, and have not been checked against the agency's full tables.

Gulf exports drove a 5.3 mb/d supply rise in two months

Global supply rose by 2.3 million barrels a day (mb/d) in October to 105.4 mb/d, after a 3 mb/d rise in September, according to the IEA. Together that is 5.3 mb/d over two months.

The recovery is centred on the Gulf. Oil exports from Gulf producers excluding Oman reached 18.4 mb/d in October, still 26% below pre-war levels. Crude exports recovered faster, to 15 mb/d, or 82% of their pre-war level. ThePrint also reported that five major producers in the Americas are set to add 1.6 mb/d to global supply this year.

The IEA raised its estimate of global supply for the October to December quarter by 3.3 mb/d.

The October stock build was entirely oil at sea

Observed global inventories rose by 52 million barrels in October, equivalent to 1.7 mb/d, the first increase since June, the IEA said. Oil held on tankers at sea rose by 86 million barrels over the month to its highest level since January.

Because the rise in oil at sea was larger than the total build, stocks held elsewhere fell on balance in October (a NewsWLD calculation from the IEA figures). Total stocks in the developed economies of the OECD fell by 47 million barrels in October. Global inventories remain 462 million barrels lower than at the start of the war, the agency said.

The 1.7 mb/d figure describes the October stock build. Estimates of the size of the expected fourth-quarter surplus, which news agencies have derived from the IEA's supply and demand balances, vary, and NewsWLD has not seen the underlying tables.

High prices are cutting demand

The IEA expects world oil demand to fall by 2.7 mb/d in 2026 to 102.3 mb/d, then rise by 2 mb/d in 2027. It said high prices are encouraging greater fuel efficiency and a shift towards electric vehicles.

Physical crude fell 32% from its October high

North Sea Dated, the benchmark price for physical cargoes, fell 32% from a high of $136 a barrel in early October to around $93 when the IEA report was written, according to the agency.

Futures also eased. Reuters reported that oil prices inched down on Friday and were heading for a second weekly decline as the United States kept its blockade of Iran in place. NewsWLD has not verified Friday's settlement prices.

Why US diesel has lagged crude

FreightWaves attributes the gap to refining. "Refined product supply, not crude, is the bottleneck," it wrote. The diesel crack against Brent, the difference between the price of diesel and crude that serves as a measure of refining margins, was $2.51 a gallon on 9 November, against an average of $0.87 in January and February. That is close to three times the early-2026 level.

IEA data point the same way. Global refinery runs fell by 1.3 mb/d in October to 81.3 mb/d, their lowest seasonal level, and the agency expects them to recover to 84.7 mb/d in December.

The US Energy Information Administration (EIA) raised its 2027 retail diesel forecast by 12% to $5.03 a gallon from $4.49, FreightWaves reported. It expects retail diesel at $6.05 a gallon in the fourth quarter of 2026, easing to $4.80 by the fourth quarter of 2027. NewsWLD has not reviewed the EIA outlook directly, and the US diesel figures in this article come from a single data provider.

What it could mean for inflation

This section is NewsWLD analysis. Lower crude prices usually reach consumers first through petrol, which can pull headline inflation down quickly. Diesel works through a slower channel: trucking, rail, farming and construction costs, which tend to reach shop prices weeks or months later. If the EIA forecast of about $6 a gallon in the fourth quarter holds, that pressure could outlast the fall in crude. Freight costs were already visible in US producer prices, which rose 6.5% on the year.

NewsWLD has not seen consumer price data or central bank statements that reflect the October stock build. How policymakers weigh cheaper crude against high diesel will feed into rate expectations and pressure on energy importers.

What to watch next

Whether global refinery runs reach the 84.7 mb/d the IEA expects in December, and how fast Gulf exports of refined products recover, will shape how quickly the diesel crack narrows. A sign that the market is loosening beyond tankers would be stock builds on land, where October data showed declines. The US blockade of Iran and the security of Gulf shipping remain the main risks to the supply recovery.