Global oil supply surged by 4.1 million barrels per day (bpd) in June, the largest monthly increase since the Strait of Hormuz crisis began, the International Energy Agency reported on Friday. The recovery, driven by a temporary US-Iran ceasefire that allowed tankers to transit the strait again, still left output 9.4 million bpd below pre-war levels. Within days of the report’s release, however, renewed military exchanges on 7-8 July halted shipping once more, leading the agency to warn that its baseline forecast of a market flipping to a 4.62 million bpd surplus in 2027 could be upended.

The reopening of Hormuz in mid-June had allowed Gulf producers to restart fields, with OPEC+ members Saudi Arabia and Kuwait contributing 2.5 million bpd of the supply gain, and the UAE, outside the alliance, adding another 940,000 bpd. But the ceasefire framework unravelled as Washington and Tehran interpreted transit terms differently, triggering US strikes on southern Iran and Iranian retaliation against military targets in the region. Ship tracking data showed traffic through the strait slowing to a trickle again, underlining the fragility of any supply recovery without a durable peace agreement.

Viewed from Asian importing capitals, the disruption has been acute. The IEA noted that global demand in May collapsed to 97.9 million bpd, a 5.3 million bpd year-on-year drop, as the effective closure of Hormuz at the crisis peak choked off up to 14 million bpd of crude flows. Lower prices and the brief resumption of exports have since begun to revive consumption, particularly in China and India, but the agency still expects demand to contract by 1.05 million bpd in 2026—the first annual decline since 2020. In OECD economies, demand is forecast to fall by 408,000 bpd, while non-OECD countries will see a 639,000 bpd drop, though both figures were revised slightly upward from last month’s report.

Global oil inventories rose by 21 million barrels in June, the first increase in four months, entirely due to a build in floating storage as on-land stocks in the Middle East and Asia continued to draw down. Brent crude futures edged lower to around $76 per barrel on Friday, reflecting a market that has so far absorbed the renewed tensions without panic. Analysts in London note that the IEA’s supply and demand projections now hinge on the assumption of a gradual normalisation of Hormuz transits, a scenario that looks increasingly uncertain. The next factual marker comes on 13 July, when OPEC publishes its own monthly assessment, offering a producer-group view on whether the market can return to surplus or will remain in deficit.