The International Energy Agency (IEA) slashed its average global oil supply forecast for 2026 by 50% on Thursday. The geopolitical tensions in the Middle East are causing the largest oil supply disruption in the history of the global market. This will cause inflation to rise and the Fed to delay rate cuts, triggering selling pressure on Bitcoin and other risk assets.
The IEA Slashes Global Oil Supply by Over 50%
The International Energy Agency (IEA) estimates global oil supply to rise by 1.1 million barrels per day on average in 2026, according to the latest Oil Market Report on March 12. It added that non-OPEC+ producers are currently accounting for the entire increase.
In February, the IEA estimated global oil supply to rise 2.4 million barrels per day. This means a downward revision of more than 50% from its previous forecast for 2026. All supply growth is expected to come from regions outside OPEC+, as the conflict has forced major oil-producing countries in the Gulf region to cut production and supply.
This comes one day after the IEA agreed to release 400 million barrels of oil to address the supply disruption due to the US-Iran war. The Middle East war has disrupted traffic through the Strait of Hormuz.
The agency claims the global oil supply in March is projected to plummet by 8 million barrels per day. Middle East Gulf countries have cut total oil production by at least 10 million barrels per day after the US-Iran war. Without a rapid restart of shipping flows, these losses are set to rise, IEA said.
As CoinGape reported, Polymarket data shows the odds of the US-Iran conflicts extending until May have increased to 70% amid escalations.
Goldman Sachs Predicts Delay in Fed Rate Cuts
Goldman Sachs pushed back its forecast for the US Fed rate cuts amid rising inflation risks due to the US-Iran war. The Wall Street giant now expects 25 bps cuts in September and December this year, Reuters reported.
Goldman Sachs earlier projected the easing cycle to begin in June, followed by another reduction in September. CME Fedatch Tool shows 42% propbability of a 25 bps Fed rate cut in September.
Bitcoin price action remains volatile, currently trading at $70,137. The 24-hour low and high are $68,998 and $71,337, respectively. Traders now await the US PCE inflation data release on Friday for cues on market direction, after US CPI inflation held steady at 2.4%.
Analyst Ted Pillows pointed out that funding rates remain mostly negative, which means a pump towards the $74,000 level could happen to liquidate late shorts. He added that Bitcoin would continue its downtrend below $60,000 after the pump.
Bitcoin 2-Day Price Chart. Source: Ted PillowsCoinGlass data showed buying sentiment in the derivatives market in the past few hours. The total BTC futures open interest jumped more than 2% to $47.12 billion in the last 24 hours. BTC futures OI climbed more than 1% on CME and Binance.
Source: https://coingape.com/iea-cuts-2026-global-oil-supply-forecast-by-50-amid-middle-east-tensions/
