IEA Slashes Global Oil Demand Forecast Amid Escalating Middle East Tensions

The International Energy Agency (IEA) has significantly reduced its forecast for global oil demand and supply, citing the ongoing Iran war as a major factor. The agency's monthly report revealed that oil consumption in 2026 is expected to decline by 2.5 million barrels per day compared to 2025, a more severe drop than previously anticipated.

This downgrade comes amid escalating tensions in the Middle East and renewed attacks on Iranian oil tankers. Oil prices have surged above $100 per barrel as concerns over supply disruptions continue to mount. The IEA warned that supplies will not return to normal until 2027, with the Strait of Hormuz remaining under an Iranian chokehold.

The agency also cautioned that refined products, such as diesel and gasoil, are particularly affected by market tightness. Prices for these fuels have surpassed $200 per barrel in some regions, a staggering increase of 94% above pre-war levels.