WASHINGTON (dpa-AFX) - The International Energy Agency said in its latest Oil Market Report that global oil demand will decline by 1.6 million barrels per day in 2026.
This is 510000 b/d more than estimated in last month's Report, as the ongoing closure of the Strait of Hormuz and elevated fuel prices continue to weigh on oil consumption.
The report warns that global oil stockpiles are dwindling rapidly and global oil demand is projected to expand by 2.4 mb/d in 2027.
Global oil inventories plunged by 69 mb in July, as renewed disruptions to exports from the Gulf and the Caspian Sea resulted in sharply lower volumes of oil on water. Onshore stocks declined by a modest 6 mb, as the pace of IEA emergency stock releases slowed, and despite continued draws in Chinese crude oil stocks. At just below 7.9 billion barrels, total observed oil stocks were down by 410 mb since the start of the Middle East war.
Global oil supply rose by 2.4 mb/d to 101.5 mb/d in July, but remained 6.3 mb/d below levels year-ago, with 8.3 mb/d of Gulf output still shut in. Renewed hostilities and maritime disruptions in July and early August undermined the recovery efforts, reducing projected 3Q26 oil supply by 1.7 mb/d compared with last month's Report.
Global oil supply is now projected to decline by 4.3 mb/d on average in 2026 and rebound by 8.3 mb/d next year to 110.3 mb/d.
Refinery crude throughputs increased further in July but remained nearly 5 mb/d below year earlier levels, at 80.9 mb/d. Continued Middle East product export disruptions and attacks on Russian refineries reduced third quarter estimates for this year by a further 370 kb/d. Global throughputs are now forecast to decline by 2.5 mb/d on average in 2026 and rebound by 3.5 mb/d in 2027. Tighter light and middle distillate markets boosted cracks and margins in the Atlantic Basin to record highs.
Benchmark crude oil prices surged to a two-month high in July as the recovery in oil supplies from the Gulf reversed course following the breakdown of the Iran-US ceasefire agreement, signed in mid-June.
Gulf oil exports, including routes bypassing the Strait of Hormuz, fell by a sharp 2.1 mb/d to 15 mb/d after the key passageway was effectively closed again in early July and oil infrastructure and tankers came under attack. With an agreement enabling the reopening of Hormuz and unhindered transit through the Bab el-Mandeb Strait still elusive, IEA again lowered supply estimates for the rest of the year. Global oil supply is now forecast to fall by 4.3 mb/d in 2026, to 102 mb/d, as growth of 1.4 mb/d from the Americas only partly offsets losses in the Middle East and Russia.
At the same time, IEA forecast for global oil demand in the second half of 2026 is reduced by roughly 550 kb/d versus last month's Report, as the continued closure of the Strait of Hormuz disrupts international supply chains and curtails product availability. Elevated fuel prices are putting further downward pressure on oil use. Global oil demand is now expected to decline by an average of 1.6 mb/d this year. Demand is projected to contract by 4.9 mb/d in 2Q26 and 2.8 mb/d in 3Q26, before flipping to growth of 580 kb/d in 4Q26.
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