The International Energy Agency (IEA) has significantly lowered its forecasts for global oil supply and demand growth, indicating that both are expected to decrease compared to 2025 levels, with the war in the Middle East disrupting oil flows and weighing on the global economy.
The IEA now predicts a decline in global oil demand of 80,000 barrels per day in 2026, compared to a 640,000 barrels per day annual increase in its previous monthly report.
“The destruction of demand will continue as shortages and high prices persist,” the IEA said, noting that the largest reductions in oil consumption came from the Middle East and Asia-Pacific region so far.
The Paris-based monitoring agency expects global oil supply to decrease by 1.5 million barrels per day this year, collapsing from a projected 1.1 million barrels per day increase last month.
Attacks on energy infrastructure in the Middle East and the effective closure of the Strait of Hormuz by Iran have caused the biggest disruption to oil supply in history, the IEA said, with a loss of 10.1 million barrels per day in March.
