IEA Cuts 2026 Oil Demand Outlook Amid Middle East War Disruptions
The International Energy Agency (IEA) has downgraded its 2026 global oil demand growth forecast by 210,000 barrels per day to 640,000 barrels per day. This revision reflects the severe impact of the ongoing Middle East conflict, which has disrupted energy flows through the Strait of Hormuz and strained global supply chains. The war has caused a projected plunge in global oil supply by 8 million barrels per day in March, with nearly 20 million barrels per day of exports disrupted due to tanker traffic standstills. Additionally, attacks on infrastructure have forced over 3 million barrels per day of refining capacity in the Gulf to shut down. Higher oil prices, reaching near US$120 per barrel for Brent crude, combined with a weakening economic outlook and reduced consumer confidence, are significantly dampening demand. The IEA warns that even if hostilities subside, structural damage to energy infrastructure and logistical backlogs may keep prices elevated long-term. This situation highlights the vulnerability of global markets to prolonged interruptions in critical transit chokepoints, potentially reshaping energy trade routes and pricing risks for the foreseeable future.
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IEA Cuts 2026 Oil Demand Outlook Amid Middle East War Disruptions
The International Energy Agency (IEA) has downgraded its 2026 global oil demand growth forecast by 210,000 barrels per day to 640,000 barrels per day. This revision reflects the severe impact of the ongoing Middle East conflict, which has disrupted energy flows through the Strait of Hormuz and strained global supply chains. The war has caused a projected plunge in global oil supply by 8 million barrels per day in March, with nearly 20 million barrels per day of exports disrupted due to tanker traffic standstills. Additionally, attacks on infrastructure have forced over 3 million barrels per day of refining capacity in the Gulf to shut down. Higher oil prices, reaching near US$120 per barrel for Brent crude, combined with a weakening economic outlook and reduced consumer confidence, are significantly dampening demand. The IEA warns that even if hostilities subside, structural damage to energy infrastructure and logistical backlogs may keep prices elevated long-term. This situation highlights the vulnerability of global markets to prolonged interruptions in critical transit chokepoints, potentially reshaping energy trade routes and pricing risks for the foreseeable future.
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