IEA Predicts Major Oil Surplus by 2027 as Strait of Hormuz Reopens

Global oil markets are expected to shift toward a significant surplus by 2027 if the Strait of Hormuz is fully reopened, according to a forecast in the latest monthly report by the International Energy Agency (IEA).

The report suggests that the resumption of oil flows through the strategic waterway could sharply increase global supply, potentially leading to what it describes as an “oil glut” within the next two years.

The projection follows reports of an interim agreement aimed at ending the Iran–U.S. conflict, under which Iran would reopen the Strait of Hormuz while the United States lifts its naval blockade on Iranian waters. The deal is expected to restore one of the world’s most critical energy transit routes.

According to the IEA estimates, more than 14 million barrels of oil per day in the Middle East had been disrupted due to the ongoing conflict and restrictions.

If the agreement holds, the agency says oil production in the Persian Gulf region would gradually return to pre-conflict levels, with Iranian exports expected to resume at full capacity once restrictions are lifted.

The IEA forecasts that by 2027, global oil supply could increase by around 8 million barrels per day, while demand is expected to grow by only about 2 million barrels per day—creating a substantial surplus in global markets.

The report also notes that oil flows through the Strait of Hormuz have already begun to recover, with shipments through the Gulf of Oman rising in early June. Transit volumes reportedly increased from 9.6 million barrels per day in May to around 12 million barrels per day.

However, the agency cautioned that the transition remains fragile due to ongoing risks, including the lengthy process of mine clearance and lingering geopolitical tensions in the region.