Oil: Tightening supply supports elevated prices – BNY

BNY notes Crude Oil prices remain elevated as doubts over a U.S.–Iran deal heighten supply concerns. The IEA reports global Oil markets tightened further in July, with demand, supply, refining runs and inventories all affected by geopolitical disruptions and high fuel prices. The 2026 demand outlook was revised lower, while observed inventories fell sharply and Brent and WTI moved higher.

IEA flags tighter global balances

"The IEA has said that global oil markets tightened further in July, with demand, supply, refining runs and inventories all hit by renewed geopolitical disruptions and high fuel prices."

"The 2026 oil demand outlook was cut to a decline of 1.6 million barrels/day (b/d) – 510k b/d lower than last month’s estimate – as the closure of the Strait of Hormuz and high prices weigh on consumption."

"Supply rose to 101.5 million b/d in July but remained well below year-earlier levels, with Gulf output still largely shut in; Q3 supply was also down substantially."

"Refinery crude throughputs climbed to 80.9 million b/d in July but remained nearly 5 million b/d below last year’s levels, with further cuts to Q3 runs expected."

"Observed inventories fell by 69 million barrels in July, while crude prices swung sharply higher amid backwardation and tighter product markets."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)