IEA vs OPEC: Oil Demand Estimates at Odds Over Strait of Hormuz Closure

The International Energy Agency (IEA) and OPEC have released conflicting estimates of global oil demand, with the IEA predicting a decline in 2026 and OPEC expecting growth.

The IEA now forecasts that global oil demand will fall by 1.6 million barrels per day (mb/d) in 2026, a downgrade of 510,000 b/d from July. This is the first time since the COVID-19 pandemic that the IEA has predicted a decline in oil demand.

The closure of the Strait of Hormuz and elevated fuel prices are cited as the main reasons for the decrease in oil consumption, with the IEA cutting its second-half forecast by roughly 550,000 b/d.

OPEC still expects demand to grow, but has trimmed its estimate for a fourth consecutive month to 580,000 b/d from 780,000 b/d. The two organizations are more than 2 million barrels per day apart in their estimates.