IEA cuts global oil demand forecast again
The Paris-based International Energy Agency (IEA) expects global oil demand to decline by 2.6 million b/d in 2026, about 100,000 b/d higher than its previous estimates.
IMAGE: Oil pump jacks. Getty Images
Global oil demand is set to slump as the ongoing blockade of the Strait of Hormuz and elevated oil prices continue to choke consumption, the IEA warned, stopping short of providing an average forecast for the scale of the rise.
Oil demand growth will continue its slump “as the Iran war manifests itself through restricted product availability, soaring fuel prices and a deteriorating economic outlook,” the energy agency said.
A slight recovery in global oil demand is expected next year, if hostilities in the Middle East cease. The IEA sees oil demand to expand by 2 million b/d in 2027 – about 600,000 b/d lower than its previous estimates.
“With supply losses outpacing weaker demand, inventories have continued to decline,” the IEA added.
Supply estimates
Global oil supply increased by 2.5 million b/d, to 102.3 million b/d in September, largely driven by growing output from the Persian Gulf producers, the IEA noted in its monthly Oil Market Report (OMR).
“OPEC+ gains of 2.1 mb/d [2.1 million b/d] were led by Saudi Arabia, while the UAE drove non-OPEC+ increases,” the IEA said.
Total crude oil exports from Gulf producers, led by OPEC’s de-facto leader Saudi Arabia, surged by 4.4 million b/d to 13.9 million b/d in September, reaching over 75% of pre-war levels, the energy agency noted.
Even so, oil supply is projected to post an average annual decline of 5.8 million b/d, to 100.7 million b/d this year, as the Middle East war continues to disrupt output from Gulf countries such as Iraq, Qatar, Kuwait, the UAE and Saudi Arabia.
“Renewed attacks in the Gulf leave the recovery fragile,” the Paris-based energy agency said.
Global oil supply is expected to reverse course and rise by 7.7 million b/d in 2027, the IEA said.
The latest renewed US-Iran hostilities could derail projections for an oil market surplus next year, the IEA warned earlier.
By Aparupa Mazumder
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