IEA Trims Oil Supply Forecast Amid Strait of Hormuz Disruptions

The International Energy Agency (IEA) has revised its global oil supply forecast downwards due to ongoing disruptions in the Strait of Hormuz, a critical shipping route. The agency projects that global oil supply will decline by an average of 4.3 million barrels per day this year, exceeding its previous estimate of 3.7 million barrel-per-day.

This increased shortfall is attributed to the continued closure of the Strait of Hormuz and elevated oil prices, which are not only affecting supply but also consumption. Global oil demand is now expected to fall by an average of 1.6 million barrels per day this year, surpassing the agency's previous forecast of a decline of 3.7 million barrel-per-day.

However, the IEA notes that the pace of demand decline is anticipated to ease gradually, with consumption returning to growth in the fourth quarter. Global oil demand is projected to rise by 2.4 million barrels per day next year.