War in the Middle East: the International Energy Agency sharply revises downwards its projection for global oil demand for the current year

Is oil becoming less and less popular? The International Energy Agency (IEA) once again revised downwards its projection of global oil demand for 2026, Wednesday June 17, in its latest monthly report. The agency explains this trend by the impact “considérable” of the war in the Middle East on the market, which also affects global oil stocks. The IEA now expects global demand for black gold to fall by 1.1 million barrels per day in 2026, a decline almost three times greater than what it forecast last month, when it still expected a return to normal from June.

The agreement reached between the United States and Iran can unblock the Strait of Hormuz, where 20% of global oil flows transit, opens “the path to a recovery of Middle East exports”. But “operational and political constraints” continue to “[faire] weigh risks on the outlook”tempers the organization, which does not foresee a rebound in demand or supply of oil before 2027.

The partial interruption of maritime traffic in this narrow passage between Iran and the Gulf countries since the beginning of March has caused a global energy crisis, forcing many countries around the world to question their dependence on hydrocarbon imports. In France, the government presented a plan to electrify uses, while several Asian countries have accelerated their transition to low-carbon energies, particularly renewables (solar, wind, etc.)

In its preliminary figures, the IEA estimates the fall in oil deliveries in the second quarter at almost 5% year-on-year, due to “the rise in fuel prices and supply difficulties”. If these figures are confirmed, this would be the first quarterly decline in deliveries since 2020, when the Covid-19 pandemic brought the global economy to a standstill.

“Despite the significant drop in demand for oil (…), reserves continue to erode at a record rate”qualifies the IEA, which reports that this melting of stocks is particularly marked in the countries of the Organization for Economic Co-operation and Development (OECD), whose reserves have reached their lowest level since 1990. Observed global stocks fell by around 220 million barrels over April and May.

For next year, the IEA forecasts an increase “modest” of demand (up to 2 mb/d), but a big rebound in supply (+8 mb/d), which could bring a “welcome respite” to the oil market, and a “opportunité” of “reconstitute” les stocks.