IEA Cuts Oil Demand Forecast Amid Middle East Disruptions

The International Energy Agency (IEA) has revised its forecast for global oil demand downwards in response to continued disruptions in the Middle East and stalled US-Iran negotiations. According to the IEA's September Oil Market Report, global oil demand will decline by 2.5 million barrels per day (b/d) in 2026, surpassing the previous forecast of a 1.6 million b/d drop. The agency expects demand to rebound by 2.6 million b/d in 2027, narrowly offsetting this year's decline.

The IEA attributes losses in consumption to middle distillates and petrochemical feedstocks, particularly in Asia. Global demand is forecast at 102.45 million b/d in 2026, down from 104.95 million b/d in 2025, before rising to 105.01 million b/d in 2027.

Supply remains constrained due to ongoing conflicts and security risks. The agency expects global oil supply to average 100.7 million b/d in 2026, down 5.7 million b/d from 2025 and 1.3 million b/d below its previous forecast. OPEC+ crude production fell 1.5 million b/d in August to 33.1 million b/d, with the Americas 'Quintet' (the US, Canada, Brazil, Guyana, and Argentina) expected to add 1.4 million b/d in 2026 and another 1 million b/d in 2027.