The International Energy Agency (IEA) has significantly revised its oil market outlook in light of the ongoing conflict in Iran, which it describes as the largest oil supply disruption in history. The IEA now anticipates an 80,000 barrels per day (bpd) decrease in demand growth for 2023, a stark contrast to its previous estimate of a 640,000 bpd increase. The agency also projects a 1.5 million bpd drop in global oil supply this year, as attacks on energy infrastructure and the effective closure of the Strait of Hormuz severely impact production and exports. This situation has resulted in a loss of 10.1 million bpd of supply in March alone. Looking ahead, the IEA forecasts a 1.5 million bpd reduction in demand in the second quarter of 2026, marking the most significant contraction since the COVID-19 pandemic. The reopening of the Strait of Hormuz is seen as critical to easing supply pressures, with the IEA's base case predicting a return to regular oil deliveries by mid-year, albeit below pre-conflict levels. However, the agency warns of a more severe scenario that could lead to long-term supply disruptions and a potential 5 million bpd drop in demand year-on-year from the second to the fourth quarter.