Global oil markets could face a major supply shock in 2026, with output projected to drop sharply in the second quarter.
This is according to a new report titled “Commodity Market Outlook – April 2026” by the World Bank.
The report warns that oil supply could fall by as much as 7 million barrels per day (mb/d) during the period, marking the steepest quarterly decline since the COVID-19 pandemic.
The projected drop is largely linked to geopolitical tensions and disruptions in key oil-producing regions.
This development raises fresh concerns about global energy stability, as tightening supply conditions could trigger price volatility and broader economic ripple effects.
The World Bank report shows that global oil supply is expected to decline by 1.5 mb/d, or 1.4 percent, over the full year in 2026, with the most severe contraction occurring in the second quarter.
Despite the projected downturn, global oil output is expected to recover later in the year if geopolitical tensions ease.
The anticipated supply disruption comes amid ongoing instability in global oil markets, particularly in regions critical to energy exports.
The report also notes that while OPEC+ has attempted to stabilise the market by adjusting production quotas, earlier shutdowns and operational disruptions continue to weigh heavily on supply.
On March 2, OPEC and its allies agreed to raise oil production by 206,000 bpd starting in April to stabilize global markets.
Crude prices spiked above $100 per barrel on March 9 amid conflicts involving the United States, Israel, and Iran, before retreating to $87 per barrel the following day.
