Middle East oil output seen below pre-conflict levels through 2027

Middle East oil output is projected to remain below pre-conflict levels through 2027, the International Energy Agency (IEA) said in its latest medium-term oil market report.

The agency cited ongoing geopolitical disruptions, underinvestment in new capacity, and operational constraints as key factors limiting production growth in the region. Despite elevated global oil prices, the IEA estimates that Middle Eastern oil supply will not return to 2023 levels within the forecast horizon.

The report highlights that while some OPEC+ members have expanded output, the pace has been insufficient to offset declines in conflict-affected areas. Iraq and Iran, two major producers in the region, continue to face infrastructure challenges and sanctions, respectively, further constraining their ability to increase supply.

The IEA’s outlook assumes no major escalation in regional conflicts but acknowledges that prolonged instability could exacerbate supply shortfalls. Global oil demand, however, is expected to rise by around 1.1% annually through 2027, driven by growth in Asia and persistent demand from transportation and petrochemical sectors.

Analysts note that the persistent supply gap could tighten global oil markets, particularly if non-OPEC+ producers such as the U.S. and Brazil do not significantly ramp up output. The IEA’s projections underscore the structural challenges facing the Middle East’s oil sector, which remains critical to global energy security.