Whitepaper: Oil Market Balances Report May 2026 (condensed version)
Oil Market Balances Report May 2026 (condensed version)
10 June 2026
The Strait of Hormuz crisis has reshaped the global crude oil balance in 2026. But the bigger challenge may lie ahead.
Rystad Energy's latest crude oil balance update revises 2026 demand down significantly, with global markets expected to return to oversupply in July. Refinery run cuts across Asia, the Middle East and Russia are driving the shift, while trade flows are already adapting to a blocked Strait — with South American producers redirecting exports and the US posting record-high shipments.
Yet with signals of a potential US-Iran deal easing some price pressure, attention is turning to what comes next. Rystad Energy projects a 5 million bpd oversupply in 2027 as pre-war supply levels resume and demand recovery falls short — raising a critical question: will crude demand ever fully return to pre-war levels?
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Demand revised sharply down — Global crude demand for 2026 cut by almost 1.5 million bpd to 82.5 million bpd, driven by Asia, the Middle East and Russia.
- 2026 flips to oversupply — The balance swung by 1 million bpd to an average surplus of 600,000 bpd, with markets tipping into oversupply in July.
- Trade flows reshaping fast — Middle East exports collapsed to 9.6 million bpd in 2Q26, down from 17.3 million bpd, while US exports hit a record 5 million bpd.
- 2027 poses a bigger test — Rystad Energy projects a 5 million bpd oversupply in 2027 as pre-war supply resumes and demand recovery falls short.