Analysts hold oil above $80 as Hormuz disruption deepens market deficit

The International Energy Agency deepened its 2026 global oil demand forecast in its August Oil Market Report, now projecting a decline of 1.6 million barrels per day — 510,000 barrels per day more than estimated in July. The agency cited the continued closure of the Strait of Hormuz and elevated fuel prices as the main forces weighing on consumption, while projecting that global oil supply will fall by 4.3 million barrels per day this year before rebounding by 8.3 million barrels per day in 2027.fibre2fashion+2

A Deeper Contraction, Then Recovery

The IEA said annual demand contractions are expected to ease from 4.9 million barrels per day in the second quarter of 2026 to 2.8 million in the third quarter, before returning to growth of 580,000 barrels per day in the fourth quarter. Global oil demand is projected to expand by 2.4 million barrels per day in 2027.ogj+1

On the supply side, global output rose by 2.4 million barrels per day in July to 101.5 million barrels per day but remained 6.3 million below year-ago levels, with 8.3 million barrels per day of Gulf production still shut in. Renewed hostilities and maritime disruptions in July and early August reduced projected third-quarter supply by 1.7 million barrels per day compared with the prior month's report, Reuters reported. The global oil market deficit is now expected to reach 1.8 million barrels per day in the third quarter — more than double last month's estimate.fibre2fashion+2

Prices Held Aloft by Geopolitics and Weak Chinese Demand

A Reuters poll of 31 economists and analysts published on Monday forecast Brent crude would average $85.08 a barrel in 2026, roughly in line with July's forecast. Analysts expect the global oil market to remain in deficit this year, with estimates ranging from 1.65 million to 3.5 million barrels per day.globalbankingandfinance

China remains a counterweight to bullish supply-side pressures. Chinese crude imports fell to a near decade-low in June and July imports were 24.3% below year-earlier levels. "China remains the biggest downside risk as import demand will likely remain sluggish as long as oil hovers above $80/bbl," said Suvro Sarkar, head of energy research at DBS Bank.globalbankingandfinance

OPEC+ Influence Fades as Disruptions Dominate

OPEC+ completed the rollback of roughly 1.65 million barrels per day of voluntary production cuts with a 188,000-barrel-per-day hike announced for September. Yet the group's ability to influence prices has diminished as Middle East supply disruptions overshadow its output decisions. OPEC also lowered its own demand growth forecast for 2026 to 580,000 barrels per day in a fourth consecutive downward revision.timesofoman+1

"Traders are no longer pricing an imminent total collapse of Gulf exports, but they are also not pricing a swift return to normal," said Phil Flynn, senior analyst with Price Futures Group.globalbankingandfinance