Russian crude output climbs in October as global supply outpaces demand

The International Energy Agency (IEA) said on Friday that Russia's crude oil production rose in October, the same month US President Donald Trump announced a diesel supply agreement with Moscow, as global oil supply outpaced demand. Russian output increased by 210,000 barrels per day to 8.73 million barrels per day, according to the agency's November Oil Market Report.

Diesel agreement announced on Oct. 9

Trump announced the agreement with Russian President Vladimir Putin on Oct. 9, saying additional Russian diesel supplies would help lower fuel prices in the US and global markets. He said Russia would immediately supply more than 300,000 tons of diesel, followed by 500,000 tons in November and another 1 million tons afterward.

The US Treasury's Office of Foreign Assets Control issued General License 135 the same day, authorizing transactions involving the sale, delivery, offloading and importation of Russian-origin diesel, including into the US, through April 7, 2027. The IEA did not directly link the increase in Russian crude production to the agreement.

Global supply exceeds demand

Global oil supply climbed by 2.3 million barrels per day to 105.4 million barrels per day in October as exports from the Gulf recovered, exceeding demand for the first time since the Iran war began. The agency raised its fourth-quarter supply forecast by 3.3 million barrels per day.

Observed oil inventories rose by 52 million barrels in October, their first increase since June, but the buildup was driven by oil held at sea while onshore stocks continued to decline. Diesel supplies remained tight amid attacks on Russian energy infrastructure and disruptions in the Middle East.

Outlook for 2027

The IEA forecasts that global oil supply will increase by 6.6 million barrels per day to 108.1 million barrels per day in 2027, outpacing projected demand growth of 2 million barrels per day. The agency expects a supply surplus in the fourth quarter, followed by larger inventory buildups next year, although attacks on shipping pose risks to the recovery.