IEA forecasts global oil demand to fall in 2026

Global oil demand is projected to decline this year for the first time since the COVID-19 pandemic, according to a new report from the International Energy Agency. The agency said on Friday, July 10, 2026, that demand is expected to fall by approximately 1 million barrels per day in 2026, a sharp reversal from pre-war expectations of growth. The contraction is attributed to the severe disruption caused by the ongoing conflict between the United States and Iran, which has drastically reduced oil production and exports from the Persian Gulf.

The crisis was triggered by U.S. and Israeli strikes on Iran in late February 2026. The most significant impact has been the repeated closure of the Strait of Hormuz, a critical maritime chokepoint for global oil shipments. According to the IEA, the demand destruction is highly skewed, with the sharpest losses concentrated in Asia's import-dependent economies and in petrochemical feedstocks like naphtha. The agency noted that higher fuel prices and transportation disruptions have suppressed consumption worldwide, particularly in transportation and industrial sectors.

While there was a fragile rebound in June, with global production rising by...