Paris: The International Energy Agency (IEA) has lowered its forecast for global oil demand in 2026, expecting consumption to decline by 2.5 million barrels per day, compared with a decrease of 1.6 million barrels per day projected in its August estimate, amid the fallout from the conflict in the Middle East and rising fuel prices.
In its monthly report released today, the IEA said global oil consumption is expected to reach 102.44 million barrels per day this year, compared with 103.29 million barrels per day in last month’s forecast. It noted that the continued stalemate in negotiations between the United States and Iran is delaying prospects for oil flows to return to normal levels next year.
The agency added that renewed hostilities between Iran and the United States since the end of August, including US and Iranian strikes targeting oil tankers in the Strait of Hormuz, through which 20 percent of global oil supplies pass, continue to put pressure on markets and drive up prices worldwide.
On the supply side, the IEA said global oil production has declined by 1.6 million barrels per day, with more than 10 million barrels per day of production in the Gulf region halted due to security conditions.
The agency expects total oil supply to fall by 5.7 million barrels per day to 100.7 million barrels per day this year, with the anticipated recovery in the Gulf region postponed until 2027.
It said total oil exports from Gulf countries in August were estimated at around 13 million barrels per day, nearly half their pre-war levels.
The IEA noted that the increase in crude oil prices remains limited compared with the surge in refined product prices. Diesel prices in the United States recently exceeded USD 6 per gallon, while the widening gap between crude and refined product prices has pushed refining margins in the Atlantic Basin to record levels.
Meanwhile, the agency said global oil inventories fell by a further 95 million barrels in August, bringing cumulative withdrawals since February to 507 million barrels, equivalent to an average of 2.8 million barrels per day.
