World oil demand set for first annual decline since 2020, IEA says
The agency said weaker demand in Asia and lower prices will outweigh a fragile rebound in supply and keep the market on track for surplus.
- The International Energy Agency revised its 2026 global oil demand forecast downward by 1.1 million barrels per day, citing lingering security disruptions; supply is projected to contract by around 3.7 million barrels per day this year.
- Tensions surged as the mid-June ceasefire unravels, threatening the partial reopening of the Strait of Hormuz; June production had jumped 4.1 million barrels per day to 98.8 million before escalation resumed.
- Regional losses remain "highly skewed in both product and regional terms," the IEA noted, with impacts concentrated in Asia's import-dependent economies as tanker traffic through the Strait of Hormuz fell to 13 vessels on Wednesday.
- US Central Command hit more than 80 targets across Iran after Iranian forces struck three commercial vessels, prompting Washington to revoke export licenses; Brent crude trades at around $76 a barrel, roughly 6% higher than pre-strike levels.
- Global oil production is projected to rebound by around 7.5 million barrels per day to 110.1 million barrels per day in 2027, potentially tipping the market into surplus if transit volumes through the Strait of Hormuz continue to recover.
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Despite the re-establishment of supplies through the Strait of Ormuz and the decline in oil prices, the new escalation in the Middle East continues to pose high risks to the world market.
IEA issues oil demand warning
The Strait of Hormuz disruption is set to trigger the first annual decline in crude consumption since Covid-19, the energy watchdog says Global oil demand is on track to post its first annual decline since the Covid-19 pandemic as the US-Iran war has severely disrupted Middle Eastern oil production and exports, the International Energy Agency...
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Predicted to fall: The International Energy Agency expects global oil demand to fall by about 1 million barrels per day in 2026, as the Iran war and resulting supply disruptions have weakened consumption. The agency says oil markets have improved after supply recovered through the Strait of Hormuz, but renewed U.S.-Iran tensions could threaten expectations of a future supply surplus. While demand is projected to rebound in 2027, the IEA warns th…
The International Energy Agency's July Oil Market Report notes that the reopening of the Strait of Ormuz raised the supply and plunged crude oil prices, while refining margins climbed to a maximum of four years.
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