The world oil market will recover gradually from the closure of the Strait of Hormuz before tipping into a significant surplus in 2027, the International Energy Agency (IEA) said in its monthly oil market report, according to Reuters.

“If the deal holds, exports and production from the Gulf should see a gradual recovery not least because Iranian oil exports can fully resume once the US blockade is lifted,” the agency, which advises industrialised countries, said.

The oil market will then enter a significant supply overhang next year, the IEA said in its first look at 2027, with global oil supply set to surge by 8 million bpd and demand rising by just 2 million bpd.