How Are Gulf Export Bottlenecks, Surging Tanker Rates, and Refinery Shifts Reshaping Global Oil Supply in Late 2026?

Key Highlights

• World oil production rebounded by 2.5 mb/d month-on-month to 102.3 mb/d in September 2026 as Gulf crude oil exports surged by 4.4 mb/d to 13.9 mb/d, exceeding 75% of pre-war levels.
• Gulf of Oman ship-to-ship transfers lifted Strait of Hormuz oil flows by 3.7 mb/d to 10.9 mb/d in September, while restored Saudi East-West Pipeline flows increased bypass exports by 970 kb/d to 5.6 mb/d.
• Global observed oil inventories declined by 10 mb in September 2026 as a 113 mb plunge in onshore storage outweighed a 103 mb surge in oil on water, leaving cumulative stocks 509 mb below end-February levels.
• North Sea-dated physical crude jumped by $26.17/bbl in September to $116.89/bbl and reached $134/bbl in mid-October, while global refinery crude throughput hit a seasonal low of 81.3 mb/d.

How can world crude oil production rebound by 2.5 million barrels per day in a single month while physical crude prices climb past $134 per barrel and onshore storage tanks drop to ten-year lows? 

According to the International Energy Agency (IEA) October 2026 Oil Market Report, the global oil market in 4Q26 is shaped by a fragile upstream rebound in the Middle East, extreme tanker freight rates, and a lag between raw crude loadings and finished product exports. 

For industrial fuel buyers, maritime operators, and supply chain planners, tracking September and October supply flows explains why physical oil balances remain in deficit heading into 2027.

How Did Gulf and OPEC+ Producers Restore 4.4 mb/d of Crude Exports in September 2026?

After security risks shut in more than 10 million barrels per day (mb/d) of Gulf output during August 2026 and pulled global supply down to 100.1 mb/d, world oil production rose by 2.5 mb/d month-on-month in September to reach 102.3 mb/d. 

That rebound lifted the IEA’s 3Q26 global supply estimate by 190 thousand barrels per day (kb/d).

Which OPEC+ and Non-OPEC+ Producers Led the September Output Rebound?

OPEC+ members delivered 2.1 mb/d of the September supply increase, raising total OPEC+ crude output from 32.80 mb/d in August to 34.80 mb/d in September (and lifting the 18 OPEC+ members bound by targets from 26.72 mb/d to 29.03 mb/d).

Monthly production shifts varied across key producers:

• Saudi Arabia and Iraq: Saudi crude output rose by 2.33 mb/d from 5.97 mb/d in August to 8.30 mb/d in September (against a 10.48 mb/d target and 12.11 mb/d sustainable capacity), while Iraqi supply increased from 3.58 mb/d to 4.10 mb/d.
• Other OPEC+ Producers: Oman edged up from 0.87 mb/d to 0.89 mb/d and Russian crude output rose from 8.36 mb/d to 8.43 mb/d (1.52 mb/d below its 9.95 mb/d target). Conversely, Kuwaiti output fell from 2.04 mb/d to 1.49 mb/d, Iranian supply declined from 2.16 mb/d to 1.94 mb/d, Libyan output eased from 1.38 mb/d to 1.29 mb/d, and Nigerian production slipped from 1.50 mb/d to 1.42 mb/d.
• Non-OPEC+ Supply Growth: Total non-OPEC+ production rose to 13.65 mb/d in September, led by the United Arab Emirates within the Gulf and supported globally by the Americas Quintet, which adds 1.4 mb/d in 2026 and 1.0 mb/d in 2027.

How Did Gulf of Oman Ship-to-Ship Transfers and Pipeline Bypasses Restore Flows?

Higher upstream output and terminal stock draws propelled total Gulf crude exports up by 4.4 mb/d month-on-month to 13.9 mb/d in September 2026, restoring crude shipments to over 75% of pre-war levels. 

Two channels enabled those volumes to move:

1. Gulf of Oman Ship-to-Ship (STS) Transfers: Expanded ship-to-ship transfer activity in the Gulf of Oman lifted total oil flows transiting the Strait of Hormuz by 3.7 mb/d month-on-month to 10.9 mb/d in September. Positioned on the Gulf of Oman coast outside the Strait of Hormuz, the UAE port of Fujairah—which recorded 7.40 million cubic meters of total bunker sales in 2025, including a 15% rise in low-sulphur marine gasoil to 427,406 cubic meters and a 26.3% increase in MGO per Fujairah Oil Industry Zone and S&P Global data—serves as the key eastern anchorage for vessels operating outside the Strait.
2. East-West Pipeline Bypass Restoration: Despite the 11 September 2026 bombing of Saudi Arabia’s East-West Pipeline, swift repairs restored pumping operations and raised regional pipeline bypass exports by 970 kb/d month-on-month to 5.6 mb/d.

Because Houthi attacks on regional infrastructure and Red Sea shipping escalated in October 2022, and supply projections remain capped. 

The world oil supply will average 101.4 mb/d in 2H26 (up from 96.4 mb/d in 2Q26) and 100.7 mb/d across the full year of 2026—an annual drop of 5.8 mb/d—before rising by 7.7 mb/d in 2027.

Why Are On-Land Oil Inventories Plunging While Oil on Water Surges?

Global observed oil inventories edged down by 10 million barrels in September 2026, bringing cumulative draws since end-February to 509 million barrels (-2.4 mb/d). 

However, floating cargoes and onshore storage moved in opposite directions:

• Oil on Water (+103 million barrels): The 4.4 mb/d surge in Gulf crude loadings and longer tanker routing pushed oil on water up by 103 million barrels in September, reversing a 65 million barrel decline in August.
• On-Land Inventories (-113 million barrels): Global onshore storage fell by 113 million barrels in September to the lowest level since at least 2016. Non-OECD crude stocks dropped by 76 million barrels—with China accounting for 78% of that drawdown—while OECD onshore stocks fell by 37 million barrels.

Meanwhile, Middle East refined product and LPG shipments lagged behind the crude rebound. 

Regional refined product exports edged up by just 210 kb/d in September to 1.9 mb/d (versus 4.7 mb/d pre-war), while LPG exports rose by 90 kb/d to 670 kb/d (versus 1.5 mb/d pre-war), leaving both below half of pre-war volumes.

What Is Driving the $27/bbl Spread Between Physical North Sea Crude and Brent Futures?

Pipeline and tanker attacks in September, accelerated crude buying by Asian refiners, and soaring war-risk freight rates created a wide gap between futures and physical markers. 

While ICE Brent crude futures rose 13% from early September to 105.80–107/bbl in mid-October, physical North Sea Dated crude jumped by $26.17/bbl month-on-month to $116.89/bbl in September (from $91.00/bbl in August) and climbed 43% to $134/bbl by mid-October, with select North Sea grades reaching $160/bbl.

How Are Record Tanker Freight Rates Affecting Global Refinery Throughputs Into 2027?

Exponential increases in crude tanker rates and steep backwardation raised delivered feedstock costs and eroded refining margins across Europe and Asia, whereas discounted domestic crude lifted US refining margins to new highs. 

Global refinery crude throughputs will hit a seasonal low of 81.3 mb/d in October 2026 during autumn maintenance—down from a summer peak of 81.4 mb/d in August (4.2 mb/d below August 2025) and the record 86.3 mb/d in December 2025 before rebounding to 84.6 mb/d by year-end. 

Across 2026, global refinery runs will fall by 2.3 mb/d to 81.7 mb/d before rising by 2.8 mb/d in 2027, though further freight spikes could trigger economic run cuts at marginal Asian and European plants before year-end.