Even with the recovery in Middle Eastern crude oil exports, oil prices remain above $100 per barrel. Latest forecasts indicate that supply in other regions may tighten further in the coming months. Ship tracking data shows that Middle Eastern crude oil exports have rebounded significantly, now approaching pre-war levels; some statistics even show that export volumes have exceeded pre-war levels.
However, the market does not yet view this recovery as a long-term trend, especially given the continued risk of further supply disruptions in the Strait of Hormuz. In the first seven days of October, nine attacks on oil tankers were reported in the Strait of Hormuz, equivalent to half the number of attacks in September.
A second factor supporting high oil prices is the weakening outlook for oil production outside the Middle East. The latest forecast from the U.S. Energy Information Administration (EIA) shows a significant change in expectations for oil supply growth from non-OPEC+ countries. In its October forecast, the EIA projected that non-OPEC+ oil supply outside the Middle East would decrease by approximately 500,000 barrels per day in 2026. By 2027, supply growth is expected to accelerate again to approximately 3.4 million barrels per day.
Previous forecasts had projected stronger supply growth in 2026, meaning a significant portion of the anticipated increase in global oil supply has actually been postponed to next year. John Wu wrote in a research report, "This indicates that non-OPEC+ supply growth outside the Middle East is clearly skewed towards 2027, highlighting the supply gap pressures expected in the coming months." North American oil production is projected to continue growing, including in the United States and Canada, while production in Central and South America and parts of Eurasia is also expected to increase. However, downward revisions to production forecasts in some countries have weighed on the overall supply outlook.
(The above views are from Commbank on October 7th and are for reference only, not investment advice.)
