A new report by the World Bank titled “Commodity Market Outlook – April 2026”, has revealed that global oil markets could face a major supply shock in 2026, with output projected to drop sharply in the second quarter.
According to the report, 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 reported linked the projected drop to geopolitical tensions and disruptions in key oil-producing regions.
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.
“In 2026Q2 alone, supply is projected to drop by almost 7 mb/d (6.6 percent; y/y), to 98.4 mb/d, the biggest quarterly fall since the COVID-19 pandemic,” the World Bank stated.
The oil market is expected to record a deficit of roughly 3.7 mb/d during the quarter, the largest on record, according to the International Energy Agency.
Disruptions linked to the Strait of Hormuz, which handles a significant share of global oil shipments, are a major factor behind the supply squeeze.
Production among the OPEC+ group is forecast to decline by nearly 5% in 2026.
Despite the projected downturn, global oil output is expected to recover later in the year if geopolitical tensions ease.
