Oil Prices Plunge as Demand Forecasts Take Hit from Iran Conflict

Oil prices dropped more than $1 on Thursday as forecasters lowered global oil demand projections for 2026 due to disruptions from the US-Israeli war on Iran.

The Organisation of Petroleum Exporting Countries (OPEC) reduced its world oil demand growth forecast for 2026 to 580,000 barrels per day in its monthly report. The International Energy Agency (IEA) also expects a 1.6 million bpd contraction in consumption this year due to restricted fuel supplies and higher prices from the conflict.

The deadlocked talks between Iran and the US have kept oil prices elevated, despite the risks for crude supply from the region remaining high. Attacks on shipping in key export routes, such as the Strait of Hormuz and the Bab el-Mandeb Strait, highlight these concerns.