IEA Cuts Oil Demand Forecast Amid Ongoing Middle East Crisis

The International Energy Agency (IEA) has lowered its global oil supplies forecast for this year due to ongoing hostilities in the Middle East. The renewed tensions have made it harder to predict oil transit through critical waterways such as the Strait of Hormuz and Bab el-Mandeb.

According to the IEA's monthly oil market report, global oil supplies will now fall by 4.3 million barrels per day (bpd), which is around four percent of total supply. This reduction compares with a 3.7 million bpd drop forecast in July and marks the lowest estimated supply for this year at 102.02 million bpd.

The IEA attributes the revised forecast to the ongoing crisis, saying that an agreement enabling the reopening of Hormuz is still elusive. With no resolution in sight, oil markets are likely to face a deeper deficit.