PARIS, April 14 (Xinhua) -- Global oil demand is now projected to decline by 80,000 barrels a day (80 kb/d) on average in 2026, from prior expectations of 730 kb/d of growth, as the Iran war upends our global outlook, the International Energy Agency (IEA) said on Tuesday.
According to IEA's latest Oil Market Report, oil demand is forecast to decline by 1.5 million barrels a day (1.5 mb/d) in the second quarter of 2026, marking the sharpest drop since COVID-19 slashed fuel consumption. As scarcity and higher prices persist, demand destruction is expected to spread.
Global oil supply plummeted by 10.1 mb/d to 97 mb/d in March, the report said, adding that continued attacks on energy infrastructure in the Middle East and ongoing restrictions to tanker movements through the Strait of Hormuz led to the largest disruption in history.
Global crude throughputs continue to struggle with disruptions to feedstock supplies and infrastructure damage that are tightening global product markets, the agency said, projecting that global crude runs will decline by 1 mb/d on average in 2026 to 82.9 mb/d.
Global observed oil inventories fell by 85 million barrels in March, with stocks outside of the Middle East Gulf drawn down by a significant 205 million barrels, as flows through the Strait of Hormuz were choked off. Oil prices posted their largest-ever monthly gain in March following the most severe supply shock on record, the report said.
The IEA noted that a two-week ceasefire between Iran and the United States provided some respite to global oil markets, but it remains unclear whether it will translate into a lasting peace and a return to regular shipping flows through the Strait of Hormuz.
Resuming flows through the Strait of Hormuz remains the single most important variable in easing pressure on energy supplies, prices and the global economy, the IEA said.
After U.S. President Donald Trump threatened on Sunday to block ships attempting to enter or leave the Strait of Hormuz, U.S. Central Command said that U.S. forces will begin implementing a blockade of "all maritime traffic entering and exiting Iranian ports" on Monday at 10 a.m. Eastern Time (1400 GMT). ■
