International Energy Agency expects global oil demand to decline for first time since 2020

Oil barrels

The International Energy Agency expects global oil demand to decline this year for the first time since 2020, attributing that to the severe repercussions of the Iranian war, which caused extensive damage to production and export operations in the Middle East.

In its monthly report on Friday, the agency stated that global demand is heading for a contraction of 1 million barrels per day year-on-year during 2026, marking the first annual decline in demand since the COVID-19 pandemic six years ago, according to CNBC.

It also warned that the recent military escalation between the United States and Iran could overturn its previous forecasts of a significant supply surplus in global oil markets next year.

The monthly report showed a slight improvement in the supply-demand gap, with total global oil supply expected to fall short of demand by 860,000 barrels per day in 2026, compared to a deficit of 920,000 barrels per day forecast in the previous report.

The International Energy Agency stated that global oil supplies rose by 4.1 million barrels per day in June, but they remain about 9.4 million barrels per day below pre-war levels.

The agency expects supply to grow by about 7.5 million barrels per day in 2027, provided there is continued improvement in navigation through the Strait of Hormuz, with demand expected to grow by 2 million barrels per day next year if that happens.

International Energy Agency

{{displayname}}

{{profession}}

{{followercount}}

{{aboutme}}