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IEA forecasts first global oil demand drop since 2020
The IEA expects demand to fall by about 1 million barrels per day year over year in 2026, citing disruptions tied to the U.S.-Israeli-led war on Iran and closures impacting the Strait of Hormuz.
The International Energy Agency expects global oil demand to fall for the first time since 2020, pointing to months of oil trade restrictions in the Middle East and wider geopolitical turmoil, according to an OilPrice account of the IEA update dated July 10.
HousingWire reports the IEA links the projected 2026 decline to the U.S.-Israeli-led war on Iran and the resulting unrest, and notes that a large share of global supply has been disrupted after the Strait of Hormuz, a key trade corridor, was closed.
The Strait of Hormuz typically carries about 20 percent of the world’s oil when fully operational, but only a small portion has passed through in recent months, the report says, while the duration of the closure remains uncertain.
The outlook also depends on how long energy trade between Asia and Europe stays constrained, OilPrice says, and the IEA’s forecast is based on assumptions that could shift as the conflict continues.