IEA Cuts Global Oil Demand Forecast Amid Ongoing Middle East Tensions
The International Energy Agency (IEA) has once again lowered its global oil demand forecast due to ongoing tensions in the Middle East. The Paris-based agency predicts that worldwide oil consumption will drop by 2.5 million barrels a day in 2026 compared to 2025, surpassing an earlier estimate of 1.6 million barrels decline.
The IEA attributes this downward revision to the impasse in negotiations between the US and Iran, as well as renewed attacks in the region, which will hinder the normalization of oil flows until 2027. The Strait of Hormuz remains under Iranian control, while Houthi rebels in Yemen have advanced on the Bab al-Mandeb Strait.
Oil prices have surged above $100 a barrel due to these disruptions and concerns over further supply chain issues. Refining problems have led to soaring diesel costs, with prices in the US surpassing $200 a barrel, 94% higher than pre-war levels.