IEA Slashes Oil Demand Forecasts Amid Middle East Tensions
The International Energy Agency (IEA) has revised down its forecasts for global oil demand and supply, citing prolonged diplomatic stalemate between the US and Iran, as well as renewed attacks in the Gulf and Bab el-Mandeb strait.
The IEA expects global crude oil demand to contract by 2.5 million barrels per day (mb/d) in 2026, a 940,000 barrel decrease from its August report. This contraction is expected to persist until 2027, when demand will rebound by 2.7 mb/d.
The agency attributes this downward revision to several factors, including record prices of fuels, especially diesel, which are increasingly affecting demand. The normalization of oil flows, previously anticipated for the second half of 2026, is now expected to be postponed until 2027 due to ongoing tensions in the Middle East.