The global oil market returned to a surplus in September, reaching 1.4 million barrels per day (mmbbl/d) in October as Middle East exports recovered from disruptions caused by the US-Israeli war with Iran, according to JPMorgan’s statement reported by Reuters.
The conflict began with US and Israeli strikes on Iran, followed by Iranian retaliatory attacks on Israel and targets across the Gulf. Disruptions to shipping through the Strait of Hormuz, a key route for around 20% of global oil supplies, severely affected regional crude exports and triggered a major supply shock.
The bank estimated that the market recorded a surplus of 1.1 mmbbl/d in September, widening to 1.4 mmbbl/d in October, nearly matching the average surplus of 1.3 mmbbl/d recorded last year.
JPMorgan said that inventory levels and trade flows indicated that excess crude supplies were returning to the market. Global crude imports reached 44.9 mmbbl/d in October, increasing by 1.3 mmbbl/d year on year.
Middle East oil exports recovered to approximately 20.7 mmbbl/d, compared with 9.8 mmbbl/d in March, although volumes remained below pre-conflict levels. Rising production from other regions also contributed to the growing surplus, with Latin America supplying an estimated additional 1.5 mmbbl/d year on year, led by Brazil, Venezuela, Guyana, and Argentina.
Meanwhile, global oil demand declined by an estimated 3.3 mmbbl/d since the beginning of the conflict, as elevated fuel prices and supply disruptions weighed on consumption, JPMorgan noted.
Separately, HSBC raised its Saudi Aramco crude production forecasts, citing a faster-than-expected recovery in oil exports.
The bank increased its fourth-quarter production forecast to 8.3 mmbbl/d, up from its previous estimate of 6.3 mmbbl/d. It also raised its 2027 forecast to 9.8 mmbbl/d from 8.8 mmbbl/d, expecting Saudi Aramco’s output to return to approximately 10 mmbbl/d by mid-2027.
Saudi crude exports recovered to around 7 mmbbl/d in October, approaching pre-conflict levels, HSBC said, adding that the recovery in Middle East exports indicated that supply disruptions caused by the conflict were easing.
