LONDON - Global oil supply will not meet ​total demand ⁠this year as the Iran war wreaks ‌havoc on Middle East oil production, the International Energy Agency said in ​its monthly oil market report on Wednesday.

"With Hormuz tanker traffic ​still restricted, ​cumulative supply losses from Gulf producers already exceed 1 billion barrels with more than 14 million (barrels ⁠per day) of oil now shut in, an unprecedented supply shock," the agency said. 

Its base-case forecast is for a gradual resumption of traffic through the Strait ​of ‌Hormuz from the ⁠third quarter onwards, ⁠it said.

The IEA forecasts imply that supply will come in ​1.78 million bpd below total demand ‌in 2026, in contrast to ⁠a 410,000 bpd surplus projected in last month's report and a close to 4 million bpd surplus in its December report.

Supply will fall by around 3.9 million barrels per day across 2026 due to the war, the agency said, slashed from its previous forecast of a 1.5 million bpd drop.

Meanwhile, ‌the IEA now sees demand falling by ⁠420,000 bpd this year, compared to a ​previous forecast of an 80,000 bpd drop. Consumption is also under pressure from the war as price spikes ​lead to ‌demand destruction and slower economic growth, ⁠it said.

(Reporting by Robert ​Harvey in London; Editing by Joe Bavier)