The International Energy Agency (IEA) has lowered its forecast for global oil demand in 2026, citing prolonged disruptions to oil exports through the Strait of Hormuz and persistently high fuel prices.
In its latest Oil Market Report, the IEA projects global oil demand to decline by 1.6 million barrels per day (b/d) in 2026, a downward revision of 510,000 b/d from its previous forecast.
However, demand is expected to recover gradually and return to growth by November, with global consumption projected to increase by 2.4 million b/d in 2027.
Global oil supply rose by 2.4 million b/d in July to 101.5 million b/d but remained 6.3 million b/d below year-earlier levels. About 8.3 million b/d of production remains shut in across the Gulf region.
The IEA expects the global oil market to face a deficit of around 1.8 million b/d in the third quarter of 2026, more than double its previous estimate.
Although the market could return to surplus later this year, the agency warned that supply risks remain high as global oil inventories continue to decline.
Global refinery throughput also remains under pressure. July runs stood at around 80.9 million b/d, nearly 5 million b/d below the same month last year.
The IEA expects global refinery throughput to decline by an average of 2.5 million b/d in 2026 before recovering in 2027.
The agency warned that shrinking inventories and continued disruptions to Gulf and Caspian Sea exports are increasing pressure on global oil markets.
