The International Energy Agency (IEA) has reported that global oil demand is projected to decrease by one million barrels per day in 2026, marking the first annual drop since the COVID-19 pandemic. This decline highlights the significant impact of geopolitical tensions, particularly the ongoing conflict involving the US and Iran, which has severely disrupted oil exports through the vital Strait of Hormuz.
The IEA’s analysis indicates that the contraction in demand is uneven, with Asia’s import-dependent economies and specific petrochemical feedstocks being the hardest hit. As the conflict escalates, the supply chains for these products have been notably affected, leading to a ripple effect on global markets and potentially higher prices for consumers.
Despite a recent rebound in production, which saw an increase of 4.1 million barrels per day in June, output remains significantly below pre-war levels. The fluctuating prices of Brent crude and WTI reflect the instability in the region, with current rates hovering around $76 and $72 per barrel, respectively.
As the situation evolves, the IEA’s forecasts depend heavily on the assumption of a stable ceasefire. However, recent hostilities have raised concerns about the reliability of this outlook, suggesting that consumers and businesses alike may need to prepare for further volatility in oil prices and supply disruptions in the near future.
Source: Euronews
