The International Energy Agency (IEA) has warned that the Iran conflict has significantly weakened global oil demand and could eventually lead to a major oversupply of crude if peace efforts hold.
The agency said the war's impact has gone beyond a traditional supply disruption and has begun destroying demand across key markets.
At the same time, the report projected a strong rebound in oil production if the U.S.-Iran agreement succeeds and the Strait of Hormuz reopens fully. The IEA expects supply growth to substantially outpace demand recovery in 2027, creating what it described as a “significant overhang” in the market.
The report said oil prices have already fallen to three-month lows as investors anticipate increased exports from the Gulf region. However, the IEA cautioned that mine clearance, shipping normalization and depleted global inventories could delay a full recovery in oil flows.
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From supply shock to oil glut: IEA flags scale of demand destruction caused by Iran war https://t.co/aOJSCCIz7R
— The Right News, Right Now. (@BradPorcellato) June 17, 2026
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