Prolonged Conflict... Saudi Arabia's August Oil Supply Hits Lowest in Over 30 Years

As the impact of the Middle East conflict continues, the International Energy Agency (IEA) has downgraded its global oil supply and demand forecasts for this year.

According to Reuters and Bloomberg, the IEA stated in its oil market report released yesterday (the 11th, local time) that this year's average daily oil supply is projected to be 100.7 million barrels, a decrease of 5.7 million barrels compared to last year.

This is a larger drop than the 4.3 million-barrel reduction projected in last month's report.

The oil demand forecast was also lowered by an average of 900,000 barrels per day, with demand expected to drop by 2.5 million barrels compared to last year.

This decline is the largest since 2020, when the COVID-19 pandemic shook the global economy.

The IEA also pushed back its forecast for when Gulf oil supplies will recover to exceed demand and when distribution will normalize to next year.

Last month's report had projected a recovery starting in the fourth quarter of this year.

As for crude supply, output from OPEC+—comprising the Organization of the Petroleum Exporting Countries and major non-OPEC producers—fell by 1.5 million barrels to 33.1 million barrels in August.

Saudi Arabia's crude oil supply in August dropped by a staggering 2.3 million barrels from the previous month to average 6 million barrels per day, falling to its lowest level in over 30 years.

This is slightly lower than the volume Saudi Arabia reported to OPEC.

Global inventories fell by 95 million barrels over the month of August, averaging 3.1 million barrels per day.

The IEA emphasized, "Inventories have played a critical role in market balance so far," adding, "With buffers shrinking and the global refining system pushed to its limits, progress in resolving the conflicts in the Middle East and between Russia and Ukraine is necessary to prevent further market pressure and demand destruction."

In a separate report released on the 10th, the IEA reported that global coal demand is on the rise as natural gas prices have surged due to disruptions in liquefied natural gas (LNG) shipments caused by the Middle East conflict.

This year's coal demand is projected to reach 8.94 billion tons, an increase of 1.2 percent from last year, marking a record high for the second consecutive year.

In its previous report released in December of last year, demand had been expected to decrease compared to the previous year, but that outlook was reversed due to the impact of the war.

The IEA pointed out, "(The rise in gas prices) has encouraged countries with gas-fired generation infrastructure and capacity to increase coal-fired power generation," adding, "The impact of sharp gas price increases has been prominent in regions such as China, South Korea, Japan, and Europe."

It was also analyzed that strong El Niño conditions, which increased cooling demand and reduced hydroelectric power generation, drove up demand in major Asian coal-consuming nations.

(Photo: Getty Images)
※ Please note: This article was translated by AI and may contain errors.