IEA Forecasts Global Oil Demand Plunge Amid Iran War Disruptions

The International Energy Agency (IEA) has sharply reduced its global oil demand forecast for 2026, predicting a decline of 80,000 barrels per day due to severe disruptions caused by the ongoing US-Israel war on Iran. This marks a significant reversal from previous projections of growth. The report highlights that the closure of the Strait of Hormuz by Iran and subsequent US naval blockades have triggered the largest oil supply disruption in history, with 10.1 million barrels per day lost in March. IEA Chief Fatih Birol warned against energy hoarding by unnamed countries, urging the release of stocks to stabilize markets. The deepest demand contractions are observed in the Middle East and Asia Pacific, particularly affecting jet fuel and LPG. Meanwhile, Russia has emerged as a financial beneficiary, with crude oil revenues rebounding significantly due to soaring global prices. The IEA emphasizes that reopening the Strait of Hormuz is critical to easing pressure on the global economy and energy security, warning of further economic shocks if supply chains remain severed.