Written by: Islam Al-Saqqa
JPMorgan Bank indicated that the global oil market has returned to recording a supply surplus, after months of disruptions caused by the US-Israeli war on Iran, as Middle East oil exports recover and supplies from other regions around the world rise.
Oil Surplus Details
The bank explained, in a note issued on Wednesday, that the global oil supply surplus reached 1.1 million barrels per day during September 2026, before rising to 1.4 million barrels per day in October, approaching last year's average of 1.3 million barrels per day.
Inventories and trade flows reflect the return of the surplus to the market, as global crude oil imports rose to 44.9 million barrels per day during October, an increase of 1.3 million barrels per day compared to the same period last year.
Recovery of Middle East Supplies
Middle East oil exports recovered to 20.7 million barrels per day in October, compared to 9.8 million barrels per day in March, although they remain below the levels seen before the outbreak of the Iranian crisis in late February.
The increase in production in other regions contributed to compensating for some of the supply disruptions, as the bank estimated that Latin America increased its crude oil supplies by about 1.5 million barrels per day compared to last year, led by Brazil, Venezuela, Guyana, and Argentina.
In contrast, global demand for oil has declined by about 3.3 million barrels per day since the conflict broke out, with the rise in fuel prices and supply disruptions affecting consumption levels.
HSBC Raises Aramco Production Forecasts
HSBC Bank raised its forecasts for Saudi Aramco's crude oil production during the fourth quarter of 2026 to 8.3 million barrels per day, compared to its previous estimate of 6.3 million barrels per day, citing the recovery of exports at a faster-than-expected pace.
The bank also raised its forecasts for Aramco's production during 2027 to 9.8 million barrels per day, compared to 8.8 million barrels per day in its previous estimates, expecting production to return to about 10 million barrels per day by mid-year.
HSBC mentioned that Saudi Arabia's crude oil exports recovered during October to nearly 7 million barrels per day, approaching pre-conflict levels, considering that the recovery of exports from the Middle East reflects the decrease in the intensity of the disruptions witnessed by oil supplies during recent months.
