IEA Sees Historic Demand Decline Amid Ongoing Supply Shock

The International Energy Agency's (IEA) September report reveals that global oil demand is projected to fall by 2.5 million barrels a day in 2026, the deepest annual decline since the pandemic wiped out consumption in 2020.

This forecast is in stark contrast to Brent crude prices, which settled above $104 on Friday, down roughly 2.9 percent from Thursday's close, but still significantly higher than what would be expected in normal conditions without a supply shock.

The IEA revised its 2026 demand forecast by 940,000 barrels a day lower than its August projection, citing economic damage from nearly six months of war, tightened credit conditions, and consumers drawing down purchases.

Global production stood at 100.1 million barrels a day in August, down 1.6 million month-on-month, with more than 10 million barrels a day of Gulf output remaining shut in due to the conflict.