IEA Trims Oil Demand Forecast as Hormuz Disruptions Bite

The International Energy Agency (IEA) has sharply cut its global oil demand forecast for this year, citing persistent supply losses from the closure of the Strait of Hormuz and high prices curbing buyer appetite. The agency now expects a decline of 1.6 million barrels per day, up from its July estimate of 1 million barrels per day.

The IEA attributes the continued closure of the Strait of Hormuz and increasing fuel prices as keeping pressure on oil consumption. Despite a ceasefire announcement, only a limited number of vessels are allowed through, driving 'sharp volatility' in global oil prices. Renewed hostilities and maritime disruptions in July and early August undermined recovery efforts.

The IEA expects global oil supply to fall by an average of 4.3 million barrels per day this year before recovering in 2026. On the demand side, the agency forecasts a return to growth in the final quarter of the year.