US Oil Liquids Output Climbs as Hormuz Recovery Leaves Global Supply Still Far Below Pre-War Levels
American production gains and easing Hormuz flows mask a 9.4 million bpd output gap that keeps the global surplus case more contested than prices alone suggest.
NYMEX WTI crude front-month was trading at $74.90 a barrel as of 2026-08-06 06:04 UTC, up 0.16%, as US total oil liquids output continued climbing into what Bloomberg described as a world where global supply is outpacing demand. Prices have not followed the surplus script cleanly.1,6
Physical market signals complicate the picture. Analysts said falling US oil inventories indicate the domestic market is absorbing barrels at a rate that contradicts a straightforward oversupply story, even as Russia was exporting record crude volumes and Kpler estimated around 67 million barrels of Iranian oil had become eligible for export under a US sanctions waiver.7
The demand side reinforces that caution. Non-OECD countries consumed 57.9 million barrels per day in 2025, representing 56.1% of the global total, and their consumption rose 2.0% for the year, according to data cited by OilPrice.com. OECD demand grew just 0.4%. Asia Pacific alone consumed 39.7 million barrels per day and accounted for roughly half of the year's demand expansion. Non-OECD countries drove about 88% of global consumption growth in 2025, and it is those markets drawing in American crude and products.5
OPEC+ has been adding output for five consecutive months. Declaration of Cooperation members averaged 33.13 million barrels per day in May, down 190,000 bpd from April on secondary-source estimates, according to OPEC's June Monthly Oil Market Report released on Thursday (2026-06-11). The group is unwinding earlier cuts even as spot prices drift lower.2
Yet the Hormuz disruption still caps the global total. The IEA's latest Oil Market Report found global output remained around 9.4 million bpd below pre-war levels despite a sharp June recovery. OPEC data showed combined production from Saudi Arabia, Iraq and Kuwait fell by around six million barrels per day between the first quarter of 2026 and May.4,3
More tankers are clearing the strait. But analysts cautioned that much of the oil now reaching global markets is flowing from stored inventories rather than newly restarted fields. A supply recovery built on inventory drawdown rather than restored field capacity has a finite lifespan.3
US producers have been the clearest beneficiaries of the disruption. Rising demand for alternative supply drove higher American exports of crude, diesel, jet fuel and LPG, further reinforcing WTI's growing role in international price benchmarks, OGJ reported.1
S&P Global's prognosis for US output beyond the current surge is more sobering. The consultancy projected US oil production at 13.34 million barrels per day for 2025, a gain of 131,000 bpd over the prior year but also 122,000 bpd below S&P Global's earlier forecast. Production is expected to fall to 12.96 million barrels per day by end-2026 as lower prices and the global surplus work back through producer economics.6
ICE Brent crude front-month was trading at $79.20 a barrel as of 2026-08-06 06:04 UTC. If the projected US output decline materializes just as Gulf producers are still relying on inventory releases to sustain apparent supply, the surplus framing that current prices embed could erode faster than those levels imply. OPEC maintained its view that demand growth would continue to outpace non-OPEC+ supply additions through 2027.2,7
The pace at which Iranian and Gulf export capacity is genuinely rebuilt, rather than substituted by inventory drawdown, is what traders will need to watch before the fourth quarter to establish whether the surplus is durable or simply a bridge to tighter conditions.3