IEA Sees the Oil Market Back in Surplus This Quarter for the First Time Since the Iran War Began

Friday, November 13, 2026 | 6:45 AM ET

Brent (January) $95.82 | WTI (December) $88.42

Brent unchanged from Thursday’s $95.82 settle, WTI -$0.32 (-0.4%). Both are headed for a second weekly decline, and Brent is down about 18% this month, per Bloomberg. The Russian diesel deal has no buyer yet, and Houthis claimed attacks on Saudi East-West pipeline and Yanbu facilities.

Bottom Line

Oil is edging lower as the US focus on its blockade of Iran and other economic pressure has eased fears of renewed direct conflict. Trump said on Truth Social that a deal with Iran is not necessary to end the war. SS WealthStreet’s Sugandha Sachdeva said that suggests Washington could rely more on sanctions and restrictions on oil shipments than on more military operations. Jeff Currie of Real Macro, formerly of Goldman Sachs, said the market is range-bound after the midterms, with little prospect of either more hostilities or a peace deal, which leaves it roughly balanced with limited ability to trade up or down. The war is now in its ninth month. A US pivot to economic pressure is a change in tone and not a settlement, and Iran’s security chief said Wednesday that no enriched material will leave the country.

Shipping is still the supply risk. On Thursday, Iran’s military said four oil tankers were hit by explosions in the Strait of Hormuz after ignoring warnings. Reuters could not verify the Iranian accounts. The same day the Houthis said they attacked a pumping station on Saudi Arabia’s East-West oil pipeline, an oil facility in the Red Sea city of Yanbu and an Aramco building in Riyadh. These are Houthi claims and Saudi confirmation of damage was not in the copy. Brent settled Thursday at $95.82.

The IEA’s monthly report is the market-balance story. It said global supply will exceed demand in the fourth quarter for the first time since the war began, with supply averaging 105 million bpd, 1.7 million bpd above forecast demand. It had previously forecast a deficit. Gulf exports have recovered to 74% of pre-war levels, with Gulf shipments excluding Oman at 18.4 million bpd in October. Saudi Arabia raised crude output to 10 million bpd and Iraq’s reached a seven-year high of 4.6 million bpd. Observed inventories rose in October for the first time since June, though the increase was mostly barrels at sea, and onshore stockpiles are still at their lowest in a decade. The IEA now sees a 2026 average deficit of 685,000 bpd, down from 1.7 million bpd last month. It sees demand falling 2.68 million bpd this year to 102.3 million bpd, a rebound of 2 million bpd in 2027, and a 2027 surplus of about 3.8 million bpd, down slightly from 3.94 million bpd. The 2027 supply growth forecast was cut by 1.1 million bpd, partly on a lower Iranian outlook because of the US blockade. OPEC said OPEC+ crude output in October was 41.23 million bpd, up 2.04 million bpd from September and 97% of the February pre-war level. The IEA called the gasoil and diesel outlook “marginally improved” as high prices cut consumption, and said members will release a further 71 million barrels of emergency stocks through the end of February, including 15 million barrels of diesel. The EIA reported Thursday that US crude and fuel inventories rose last week on softer product demand and a jump in imports.

The Russian diesel arrangement is running into the legal and commercial problem raised earlier this month. Bloomberg reports the deal to supply roughly 36 million barrels to the US and other buyers has found no public customer. Several trading companies and counterparties have judged the risk too large, according to people familiar with the deliberations, in part because they doubt the October 9 Treasury waiver supersedes the 2022 law banning imports of Russian oil and fuel. Rapidan Energy’s Bob McNally said there is strong reluctance among private companies because of the legal and reputational risk, and Phillips 66’s chief executive has said the company has “no intent to acquire Russian diesel.” One vessel that had signaled it was US-bound was last seen about 400 nautical miles off the East Coast, moving in a zigzag, and Brazilian distributors are now being offered Russian diesel. A White House official told Bloomberg the diesel is on the water and will ease prices. The AAA national diesel average was $6.10 a gallon on Wednesday, about 40 cents below its record. Bloomberg also reports Ukraine hit Russia’s largest refinery in western Siberia for a third time.

The Democratic senators’ letter to the CFTC is a market-integrity item to note. Senators including Schiff, Warnock and Klobuchar asked the agency about its probe of unusually heavy oil trading on March 23, just before Trump backed away from threats to strike Iranian power plants. Bloomberg reported last month that a senior official asked staff to retract an analysis of suspicious trades that had gone to enforcement. The CFTC’s chairman, Michael Selig, has said the probe is ongoing and there was never any pullback.