Global oil supply fell 1.8M barrels per day in April

Global oil markets faced further tightening in April as supply declined for the third consecutive month, according to the International Energy Agency (IEA). In its latest report released Wednesday, the IEA said world oil production fell by an additional 1.8 million barrels per day (mb/d) to 95.1 mb/d, bringing cumulative losses since February to 12.8 mb/d.

Hormuz closure and regional impact

The agency noted that output from Gulf countries affected by the closure of the Strait of Hormuz stood 14.4 mb/d below pre-war levels. However, higher production and exports from the Atlantic Basin are providing some relief. Assuming flows through the strait gradually resume from June, the IEA projects global oil supply will decline by an average of 3.9 mb/d in 2026 to 102.2 mb/d.

Demand contraction and sectoral effects

The IEA also announced that world oil demand is forecast to contract by 420,000 barrels per day year-on-year in 2026 to 104 mb/d — 1.3 mb/d less than the agency’s pre-war forecast. The sharpest decline will occur in the second quarter of 2026, with demand dropping by 2.45 mb/d. The petrochemical and aviation sectors are currently most affected, but higher prices, a weaker economic environment, and demand-saving measures will increasingly impact fuel use.