In 2023, the International Energy Agency predicted that by 2028 the world’s oil companies would produce more oil than people wanted to buy. Prices responded to that and similar projections of slowing oil demand, dropping too low to attract investment for new wells and refineries.

No forecast anticipated that the Strait of Hormuz, the main route for Middle Eastern oil to reach global markets, would be almost completely blocked.

So in March 2026, when the strait closed in the wake of U.S. and Israeli attacks on Iran, there was little anyone could do to quickly restore the flow of oil and gas the world’s economy depends on. Some countries did have strategic reserves, but a massive coordinated release from those supplies didn’t make a difference for long – and those reserves may need to be replenished, paradoxically increasing demand for oil in the future.

Just before that conflict broke out, my fellow researcher, Hiroyasu Sakaguchi at the Institute of Energy Economics, Japan, and I wrote a report on oil and gas demand forecasts warning that even in the midst of oversupply, the global buffer for disruption is quite fragile. It was published by the Trilateral Energy Security Committee, which promotes energy-security cooperation between the U.S., Japan and South Korea.

As the fighting has continued, oil prices have climbed, causing fuel shortages and raising prices not only of gasoline and diesel, but fertilizer, food, consumer goods and just about everything else.

What an oil forecast is

The reasons today’s demand and supply are so mismatched took shape years earlier, in spreadsheets that most people don’t know about or ignore.

It can take about 20 years to go from exploring a new oil or gas field to shipping petroleum from it. When companies, banks and governments are deciding what projects to invest in, they look for indicators of how much oil and gas the world will want........

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