Oil Demand Forecast Cut by 510,000 Barrels as Hormuz Closure Bites

The International Energy Agency (IEA) has revised its forecast for global oil demand, predicting a contraction of 1.6 million barrels per day in 2026 due to the ongoing closure of the Strait of Hormuz and high fuel prices.

This is 510,000 barrels more than previously projected, with the IEA attributing the volatility to the breakdown of the Iran-US ceasefire in mid-June.

The report states that annual demand contractions will ease from 4.9 million barrels per day in the second quarter to 2.8 million barrels per day in the third quarter, before returning to growth in the final quarter of the year.

However, global oil output rose by 2.4 million barrels per day to 101.5 million barrels per day in July, but remained 6.3 million barrels per day below year-ago levels, with 8.3 million barrels per day of Gulf production still shut in.