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Oil Demand Contracts in 2026, Rebounds in 2027: IEA

Guavy AI Editorial Team
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According to the International Energy Agency (IEA), global oil demand is expected to contract by 1.6 million barrels per day (mb/d) in 2026, a deeper decline than previously forecast. This contraction is attributed to the closure of the Strait of Hormuz and elevated fuel prices, which are weighing on consumption.

The IEA's latest report projects that demand will fall by 4.9 mb/d in the second quarter (2Q26) and 2.8 mb/d in the third quarter (3Q26), before rebounding to growth of 580 kilobars per day (kb/d) in the fourth quarter (4Q26).

Global oil supply, on the other hand, is expected to decline by 4.3 mb/d in 2026 and rebound by 8.3 mb/d next year to 110.3 mb/d.

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