Global Oil Demand Slumps as Middle East Tensions Rise

The International Energy Agency (IEA) has revised its forecast for global oil demand, expecting it to shrink by 1.6 million barrels per day in 2026.

This is a significant increase from their previous estimates, with the IEA citing ongoing closure of the Strait of Hormuz and elevated fuel prices as major contributors to this decline.

The agency also noted that global oil demand will contract due to the ongoing hostilities in the Middle East, which have resulted in a shortage of 1.8 million barrels per day in the third quarter of 2026.

However, the IEA expects oil demand to recover next year if hostilities in the Middle East cease, with an estimated expansion of 2.4 million barrels per day in 2027.