BAKU, Azerbaijan, August 12. The International Energy Agency (IEA) has announced its forecasts for oil production in Azerbaijan.

According to the IEA's monthly report, crude oil production in the country averaged 440,000 barrels per day in July 2026. This indicator hasn't changed compared to June.

The IEA report noted that geopolitical tensions in the global oil market and disruptions in oil supplies have a significant impact on the market balance.

According to the agency's forecast, in 2026, global oil supply will decrease by an average of 4.3 million barrels per day (mb/d) to 102 million barrels. In 2027, supply is expected to increase by 8.3 million barrels to 110.3 mb/d.

"World oil demand is forecast to decline by 1.6 mb/d in 2026, 510 kb/d more than our estimate in last month’s Report, as the ongoing closure of the Strait of Hormuz and elevated fuel prices continue to weigh on oil consumption," the report said.

The IEA predicts that global oil demand will increase by 2.4 mb/d in 2027.

According to the report, global oil production increased by 2.4 mb/d in July compared to the previous month, reaching 101.5 mb/d. However, the figure was 6.3 million barrels lower than the same month last year. 8.3 million barrels of production in the Gulf countries are still closed.

The IEA noted that the resumption of military operations in July and early August and problems in maritime transport have made it difficult to restore oil production. For this reason, the global oil supply forecast for the third quarter of 2026 has been reduced by 1.7 mb/d compared to the previous report.

"The global oil balance is expected to show a deficit of 1.8 mb/d in the third quarter of 2026. This is more than double the deficit of about 800,000 barrels projected in last month's report," the IEA said.

According to the agency, global oil inventories fell sharply in July, falling by 69 million barrels. The main reason for this decline was the decline in the volume of oil transported by sea. At the end of July, global oil reserves fell below 7.9 billion barrels.

According to the IEA's calculations, global oil reserves fell by a total of 410 million barrels from the end of February to the end of July.

"Although the market is projected to return to surplus towards the end of this year, risks remain substantial, and the urgency of reopening the Strait has increased, as previously available inventory buffers are rapidly depleting," the report emphasized.

In addition, significant changes were recorded in the oil refining sector in July. Although the volume of crude oil processed by global refineries increased by 1.8 mb/d in monthly terms, it was about 5 million barrels per day lower than in the same period last year.

The IEA said that as a result of a sharp increase in the price differentials between diesel fuel, jet fuel, and gasoline, oil refining margins in the Atlantic basin rose to a record high in July.

The agency also noted that benchmark oil prices fluctuated in a range of about $40 per barrel in July. The price of North Sea Dated oil increased by $25.67 during the month, reaching $96.80 per barrel at the end of July and is currently at around $92 per barrel.