Damascus, Aug. 12 (SANA)The International Energy Agency (IEA) sharply lowered its forecast for global oil supply this year, citing disruptions linked to the closure of theStrait of Hormuzand continued hostilities in the Middle East.

In its monthly report on Wednesday, the Paris-based agency said global oil supply is expected to decline by 4.3 million barrels per day (bpd), or around 4%, this year, compared with its previous forecast of a 3.7 million bpd decline in July.

The IEA said global oil supply has fallen well below demand because of the closure of the Strait of Hormuz, the U.S. blockade of Iranian oil exports, attacks in the Bab al-Mandab Strait and reduced Kazakh CPC Blend exports, as well as drone attacks in the Black Sea affecting exports.

The expected decline would bring total global supply to 102.02 million bpd, around 1.27 million bpd below demand this year, compared with a deficit of 860,000 bpd implied by the agency’s July forecasts.

Middle East oil loadings had recovered to 20 million bpd at the beginning of July, broadly in line with pre-war Hormuz traffic, but fell to 12 million bpd later in the month. Middle East production was 8.3 million bpd below pre-war levels in July, compared with 14 million bpd of lost output at the peak of the crisis.

“The nascent recovery underway from mid-May narrowed the supply deficit in June, but renewed hostilities undermined trade flows,” the IEA said.

The agency expects an oil-market deficit of 1.8 million bpd during July-September, a 1 million bpd downward revision from its July forecast. That would be the deepest quarterly deficit since the fourth quarter of 2021, according to IEA data.

For 2027, the IEA expects global supply to exceed demand by 4.61 million bpd, assuming de-escalation in the coming months. The projected surplus could allow inventories to recover to their February 2026 level by the middle of next year, following cumulative stock draws of 410 million barrels since the Iran war began.

The IEA also lowered its forecast for global oil demand, expecting it to decline by 1.6 million bpd this year, compared with a decline of around 1 million bpd projected last month.

The Organization of the Petroleum Exporting Countries (OPEC), which also updated its forecast on Wednesday, continues to expect demand to grow, although it lowered its forecast by 200,000 bpd to 580,000 bpd.

The IEA said restricted refined-fuel supplies and higher prices had curtailed demand, with naphtha and gasoil among the products most affected and Asia and the Middle East recording the largest year-on-year declines.

Russian oil refining remained close to a 20-year low at 3.9 million bpd in July as Ukrainian drone attacks affected most refineries west of the Urals Mountains. Russian oil production fell by 100,000 bpd to 8.76 million bpd, below its OPEC+ target, according to IEA data.

Global refinery crude processing declined by 5 million bpd year on year in July, the IEA said, as available capacity was unable to offset supply bottlenecks, pushing refining margins to record highs.

Kplerdata showed that the number of vessels tracked in the Strait of Hormuz fell to a one-week low of eight on Tuesday as vessel operators avoided the key waterway amid continued hostilities in the Middle East.

The eight-vessel tally was below a 10-day average of about 12 and was the lowest daily count since Aug. 5. Only one vessel, a coal carrier, exited the strait, while the other seven were entering and all used the Iranian route.

Separate LSEG data showed 11 transits through the strait on Tuesday, down from 14 the previous day.

Around 130 to 140 ships typically transited the strait before Iran closed the waterway after the U.S.-Israeli attacks began on Feb. 28.Kpler data also showed that 30 vessels crossed the Bab al-Mandab Strait at the southern end of the Red Sea on Tuesday, above the 10-day average of 25.