The International Energy Agency reduces its 2026 global oil demand outlook due to Gulf supply disruptions and elevated energy prices.
The International Energy Agency has cut its 2026 global oil demand forecast by 1.1 million barrels per day, down from a prior estimate of a 420,000-barrel decline. The revision reflects ongoing supply disruptions in the Gulf and higher energy prices linked to regional conflict.
Previously, the IEA had projected a more modest contraction, but escalating tensions and trade route instability have worsened the outlook. The agency expects demand growth to resume in 2027, with consumption rising by 2 million barrels per day as markets stabilize and supply chains normalize.
A preliminary U.S.-Iran agreement to ease hostilities may help restore flows through the Strait of Hormuz, potentially reaching 8 million barrels per day by 2027. However, the IEA cautioned that full recovery will take time due to lingering logistical challenges.