European diesel prices remained 77% above pre-war levels even as recovering Gulf exports pushed global oil supplies above demand for the first time since the Iran war began, the International Energy Agency said on Friday.
Prices have fallen sharply in recent weeks, with North Sea Dated crude falling 32% from an early October peak of $136 a barrel to about $93 by the time the IEA wrote its report. European diesel prices fell 11% over the same period, to nearly $180 a barrel.
The IEA said diesel shortages remained the market’s “overriding concern”. Attacks on Russian energy infrastructure continued to disrupt the country’s diesel exports, adding to supply losses in the Middle East. The agency said releasing emergency diesel stocks faster over the coming months would help cover the shortfall while refinery output recovers.
Despite continued attacks on tankers, Gulf oil exports excluding Oman reached 18.4 million barrels per day in October, still 26% below pre-war levels, the Paris-based agency said in its monthly report. Crude led the recovery, while Gulf exports of refined products and liquefied petroleum gas remained at roughly half their pre-war levels.
"The oil market is showing tentative signs of rebalancing, with global oil supplies surpassing demand for the first time since the outbreak of the war in Iran," the IEA said.
Global oil supply rose by 3 million barrels per day in September and a further 2.3 million in October, reaching 105.4 million barrels per day. The IEA expects global oil supplies to exceed demand in the fourth quarter but warned that continued attacks on shipping could disrupt the recovery.
Global oil demand is forecast to fall by 2.7 million barrels per day this year, to 102.3 million, as high fuel prices and disruptions to Gulf exports weigh on consumption. The IEA expects demand to recover in 2027, though it sees only a small rise in road fuel use as more drivers switch to electric cars and vehicles become more fuel-efficient.
