finance
IEA Forecasts First Annual Drop in Global Oil Demand Since 2020
The International Energy Agency projects global oil demand will decline by about 1 million barrels per day in 2026 due to conflict in the Middle East. The forecast marks the first such decrease since the pandemic year of 2020.
Jul 16, 5:00 PM·1m read1 source
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The International Energy Agency projects that global oil demand will fall by roughly 1 million barrels per day in 2026, the first annual decline since 2020. -Israeli-led war on Iran and the closure of the Strait of Hormuz. The Strait of Hormuz normally carries about 20 percent of the world's oil when fully operational.
Only a small proportion of that volume has moved through the waterway in recent months because of the conflict. OPEC has cut its own 2026 global oil demand growth forecast for a third straight month. The IEA report estimates that global oil supply could fall by 3.7 million barrels per day in 2026, creating a shortfall of around 860,000 barrels per day relative to demand.
The IEA forecast assumes a ceasefire will allow gradual reopening of the Strait.5 million barrels per day in 2027 if the waterway reopens. The agency noted that renewed exchanges of fire in the Gulf this week highlight the risks of failing to reach a lasting peace agreement.
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