IEA Predicts First Decrease in Global Oil Demand Since 2020
9 hours ago
- Global oil demand may decline for the first time since 2020, driven by Middle East trade restrictions and geopolitical unrest.
- The IEA forecasts a 1 million bpd drop in 2026, citing the U.S.-Israeli-led conflict with Iran and Strait of Hormuz disruptions.
- The Strait of Hormuz closure, a key oil transit route, has severely cut supply and disrupted global trade.
- IEA's outlook hinges on a ceasefire reopening the Strait; renewed hostilities pose risks to recovery.
- Global supply could fall by 3.7 million bpd in 2026, with potential deficits worsening if the Strait remains closed.
- OPEC lowered its 2026 demand growth forecast to 780,000 bpd, reflecting market constraints and geopolitical tensions.
- Countries are diversifying energy sources and seeking alternative routes to reduce Middle East dependence.
- OPEC+ production rose to 36.28 million bpd in June, but targets remain unmet due to Strait restrictions.