IEA expects oil demand to fall in 2026

The International Energy Agency believes the closure of the Strait of Hormuz and higher oil prices will drive oil demand down in 2026. The IEA now expects demand to contract by 1.6 million barrels per day over the year, with the decline reaching 2.8 million barrels per day in the third quarter. Demand should pick up again in the fourth quarter, however, rising by 580,000 barrels per day. On average, world oil demand would reach 103.29 million barrels per day over 2026 as a whole. The agency estimates that oil supply should fall by 4.3 million barrels per day in 2026, to 102 million barrels per day. According to the IEA, higher output in North and South America only partly offsets lower production in the Middle East and Russia. The supply cut is nevertheless smaller than had been expected at the start of the war in Iran, as producing countries such as Saudi Arabia and the United Arab Emirates have found ways of bypassing the Strait of Hormuz.