IEA Says June Oil Output Rebounded But Still Runs 9.4m bpd Below Pre-War Level
The largest monthly supply gain in months masks a production hole from the US-Israel-Iran war that resumed Hormuz flows have only partly refilled.
Global oil supply posted its largest monthly increase in months in June as shipments through the Strait of Hormuz partially resumed, the International Energy Agency said in its latest Oil Market Report on Friday (2026-07-10). Yet output still sat around 9.4 million barrels per day below where it stood before the US-Israel-Iran war.7
The gap is the number to track, not the recovery. A single strong month restores confidence in shipping lanes; it does not rebuild the volume lost when Gulf producers shut in supply. Production is climbing off a deep floor, and the distance back to pre-conflict levels is still measured in millions of barrels a day.7
That floor was extraordinary. In its May Short-Term Energy Outlook, the EIA assessed that Iraq, Saudi Arabia, Kuwait, the UAE, Qatar and Bahrain had collectively shut in 10.5 million barrels per day as disruptions escalated through the spring.5 The IEA put the same loss figure at 10.5 million barrels daily, describing a supply shock among the largest on record.3
The damage was concentrated in the biggest producers. Kpler data cited in mid-May showed Saudi Arabia losing more than 3 million barrels daily, Iraq producing 2.88 million barrels daily less, and Iran running 1.69 million barrels daily lower, with Kuwait down 1.75 million barrels daily. Cumulative lost supply since February 28 had reached 782 million barrels by May 8 and was on track to top 1 billion by month-end.3
Hormuz was the choke point. Around 20% of the world's oil moved through the strait before the war, and both sides used the waterway as a bargaining chip while commercial traffic stayed largely blocked.2 The June rebound suggests some clarity has arrived; resumed Hormuz shipments drove the monthly gain, according to the IEA, even as regional output stayed below its pre-conflict baseline.7
Where this goes next divides the market sharply. One camp still frames the risk as scarcity. The IEA's monthly outlook expected global supply to fall by roughly 3.9 million barrels daily over the year, a figure the agency acknowledged was far smaller than the 10.5 million already lost from the Middle East.3 IEA members agreed to release 400 million barrels from strategic stocks, and director Fatih Birol signalled readiness to act again, noting the release represented only 20% of the agency's resource.1
The opposing case is a glut. If Middle East production and exports keep recovering following the US-Iran peace agreement, the market could swing from one of the largest disruptions in history to a surplus above 5 million barrels per day in 2027, the IEA warned on 17 June (2026-06-17).6 Record global oil stocks were cited as a reason a severe overhang could exceed demand by almost 4 million barrels daily.3
Prices reflect the easing risk premium more than the residual shortfall. ICE Brent crude front-month stood at $75.22 and NYMEX WTI front-month at $71.41 in weekend quotes on 2026-07-12. Those are not war-premium levels; the market has priced the return of Hormuz flows well ahead of the 9.4 million bpd the IEA says is still missing.7
One structural change complicates the OPEC read. The UAE said in May it would quit OPEC to focus on national interests, a move observers called a major blow to the Vienna group without ending it.4 Coordinated signaling from a smaller cartel matters more, not less, when the market is trying to gauge how fast the missing barrels come back.
Two things carry the next move. Whether Hormuz throughput holds its June pace or stalls again on renewed friction, and whether OPEC+ members signal restraint or an open-taps return as barrels recover.7,4 The IEA has kept 80% of its strategic release capacity in reserve; if flows falter, that buffer is the next lever.1