Hormuz Closure to Cut Global Oil Demand by 1.6 Million Barrels
The prolonged closure of the Strait of Hormuz is taking a toll on global oil consumption. The International Energy Agency (IEA) warns that this disruption will erode demand by 1.6 million barrels per day in 2026, citing both high energy costs and the blockage of the world's most critical oil chokepoint.
The IEA attributes the projected decline to a combination of factors, including demand destruction from elevated fuel prices and disrupted supply chains. The closure has driven a sustained rally in crude prices, with buyers scrambling to secure alternative supplies.
Major importers across Asia are facing acute risks due to the closure, with economies that depend heavily on Gulf crude facing higher input costs and potential supply shortfalls. This adds to inflationary pressures already weighing on consumers.
The IEA's demand outlook suggests that economic damage could persist well into next year even if the strait reopens. Diplomatic efforts continue, but neither side has signaled a breakthrough, leaving global energy security hanging in the balance.