The IEA warned that a Middle East peace deal could trigger an oil glut next year as Iranian production ramps up. The agency’s latest monthly report, released after Washington and Tehran agreed to a 60‑day ceasefire extension, projects a sharp rebound from Gulf fields shut during the conflict.

IEA analysts say oil flows will resume gradually this year as countries restart fields idle for months. Production could rise 8 mn b/d to 110 mn b/d by 2027, dwarfing the modest 2 mn b/d lift in global demand. That overhang may give markets room to rebuild inventories or stockpile strategically.

Oil prices have slumped since the ceasefire announcement, with Brent trading around $78.50 a barrel, down from $87 a week earlier and a peak of $126 in April. West Texas Intermediate sits just above $75, a steep drop from its April high of nearly $120. Investors now weigh supply gains against lingering demand uncertainty.

The IEA’s forecast comes as Gulf producers like Saudi Arabia and the UAE signal rapid production recoveries, while the US, Brazil and Venezuela have already increased output. With OECD stock levels at their lowest since 1990, a surplus could force a price correction that reshapes strategic reserve policies and reshuffles market power among major producers.