The sharp hit to global oil production from the Iran war is poised to flip the oil market into a supply deficit this year, analysts say, a huge swing in forecasts that erases previous expectations of comfortable oversupply, Reuters reports.

The conflict, which began on February 28 with US and Israeli strikes on Iran, has effectively stalled flows through the Strait of Hormuz, a passageway for about a fifth of global oil consumption. Production shut-ins and attacks on energy infrastructure have also cut deeply into output.

Eight analysts polled by Reuters expect oil market demand to outpace supply by 750,000 barrels per day (bpd) on average this year. A similar poll last September had predicted a 1.63 million bpd surplus for 2026, driven largely by OPEC+’s decisions to unwind some of its output cuts, and strong production from other producers like the US, Brazil and Guyana.

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