Iran Conflict Weighs on Oil Prices as Demand Projections Plunge
Oil prices plummeted over $1 on Thursday as forecasters revised global oil demand projections for 2026 downward due to disruptions caused by the US-Israeli war on Iran. Despite supply constraints from the conflict providing a floor for the market, Brent futures dropped $1.29, or 1.5%, at $87.69 a barrel, while US West Texas Intermediate crude fell $1.30, or 1.6%, to $81.97.
The Organisation of Petroleum Exporting Countries (OPEC) lowered its world oil demand growth forecast for 2026 to 580,000 barrels per day in its monthly oil market report on Wednesday. The International Energy Agency also reduced its consumption forecast this year by 1 million bpd due to restricted fuel supplies and higher prices from the war.
A surprise build in US commercial crude oil inventories put additional pressure on prices. According to the Energy Information Administration, crude stocks rose by 17.4 million barrels to 424.4 million barrels in the week ended August 7, their highest since June 5.