IEA Downgrades 2026 Oil Demand Forecast Amid Strait of Hormuz Disruptions

The International Energy Agency (IEA) has revised its global oil demand forecast for 2026, citing the ongoing closure of the Strait of Hormuz and elevated fuel prices. The agency now projects a decline of 1.6 million barrels per day in 2026, down from its previous monthly report.

The IEA attributes the downgrade to the continued disruptions in oil exports due to the closure of the Strait of Hormuz and the impact of higher fuel prices on consumption. However, the agency notes that the pace of decline will ease over the coming quarters, with a projected decrease of 4.9 million barrels per day in the second quarter of 2026 falling to 2.8 million barrels per day in the third quarter.

The IEA also reduced its projected oil supply for 2026 by 1.7 million barrels per day due to renewed hostilities and maritime disruptions affecting the region, particularly in the Gulf area. The agency now forecasts a global oil supply contraction of 4.3 million barrels per day on average in 2026.