Oil production outages fall to 4.8 million barrels a day as Gulf exports recover

Key Facts

Crude oil production outages averaged 4.8 million barrels a day in September, according to U.S. Energy Information Administration estimates, as Gulf supplies recovered and global oil inventories continued to decline. The estimate appeared in the Short-Term Energy Outlook released on October 6, with forecasts completed on October 1. Production outages had averaged 5.8 million barrels a day in August before declining the following month. Disruptions previously peaked in May at 10.9 million barrels a day, according to the EIA's estimates of crude production shut in during the conflict. As disruptions eased, the EIA estimated global oil inventory draws averaged 1.9 million barrels a day in the third quarter. The International Energy Agency estimated that observed global inventories at the end of September were about 509 million barrels below pre-war levels.

In its October Oil Market Report, the IEA estimated global supplies rose by 2.5 million barrels a day month on month in September to 102.3 million barrels a day. Gulf producers led the supply increase, according to the agency, alongside a rise in crude exports from the region. Gulf exports rose by 4.4 million barrels a day in September to 13.9 million barrels a day, led by Saudi Arabia. On shipping through the Strait of Hormuz, the agency estimated oil flows increased by 3.7 million barrels a day, bringing the total to 10.9 million barrels a day in the same month. Ship-to-ship oil transfers in the Gulf of Oman helped increase flows through the strait, according to the agency.

On the demand side, the IEA forecast global oil consumption would fall by 2.6 million barrels a day this year. The agency attributed the expected contraction to higher prices and a deteriorating economic outlook, as global supplies regain some of their flows. On transport costs, the EIA linked higher oil tanker freight rates to rising insurance costs. The agency said "increased insurance costs" were contributing to higher freight rates for tankers carrying crude to buyers. Those higher freight rates feed through to the cost of crude delivered to refineries, according to the EIA.

In the oil products market, the IEA estimated global diesel exports fell by about 700 thousand barrels a day in September compared with the same month a year earlier. In the United States, East Coast distillate inventories in September were 32% below their five-year seasonal average, according to the EIA. The agency forecast those inventories would remain between 20% and 30% below the five-year average during the coming winter. It said low global distillate inventories would make it harder for East Coast importers to increase imports by the volumes needed during the heating season. That limits their ability to restore domestic inventories to levels closer to normal during the season, according to the EIA's estimates. Globally, the IEA expects depleted gasoil inventories cannot be replenished, beyond normal seasonal fluctuations, before the second half of next year.

For the fourth quarter, the EIA's forecasts assume restrictions on Middle Eastern oil flows will persist despite the recovery in supplies and exports recorded in September. The agency puts average crude production outages during the quarter at 4.5 million barrels a day. It also expects global oil inventories to continue falling, with additional draws averaging 0.7 million barrels a day over the same period. In its October price forecasts, the EIA estimated Brent crude would average $105 a barrel in the fourth quarter. That represents an increase of $14 a barrel from its estimate for the same quarter in the September report. The EIA is scheduled to release its next Short-Term Energy Outlook update on November 10, 2026.