IEA

Published on
12/08/2026 – 16:50 GMT+2

Two of the most influential voices in energy markets set out opposing readings of the year on Wednesday.

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The IEA now expects the world to burn less oil in 2026 than it did in 2025, its first such call since Covid-19 ground the global economy to a near-halt, while OPEC still pencils in growth, leaving them more than two million barrels a day apart.

The Paris-based IEA now expects global oil demand to fall by 1.6 million barrels per day (mb/d) in 2026, a downgrade of 510,000 b/d from July.

“The ongoing closure of the Strait of Hormuz and elevated fuel prices continue to weigh on oil consumption,” it said, cutting its second-half forecast by roughly 550,000 b/d.

OPEC still expects demand to grow, though its estimate has been trimmed for a fourth consecutive month, to 580,000 b/d from 780,000 b/d.

The producer group has consistently argued the war has done less damage to consumption than Western forecasters believe, and the two sets of numbers imply a difference of about 2.2 mb/d in what the world will burn this year.

Supply still 6.3 million barrels short

The supply picture explains the pessimism.

Global production rose by 2.4 mb/d to 101.5 mb/d in July but remained 6.3 mb/d below year-earlier levels, with 8.3 mb/d of Gulf output still shut in.

Gulf production climbed to 23.9 mb/d, yet regional exports fell 2.1 mb/d to 15 mb/d after the Strait of Hormuz was effectively closed again in early July and tankers and infrastructure came under attack, with loadings sliding from 20 mb/d to around 12 mb/d.

With no deal to reopen the waterway or secure passage through Bab el-Mandeb, the IEA cut its supply forecasts again and now expects output to fall by 4.3 mb/d this year.

Observed global stocks also dropped by 69 million barrels in July to just under 7.9 billion, down 410 million since the war began.

Both bet on 2027

Where the two agree is next year.

OPEC now expects demand to grow by 2.2 mb/d in 2027, an upgrade from the 1.94 mb/d it forecast last month, while the IEA goes further still at 2.4 mb/d.

That is an inversion worth highlighting, as the gloomier forecaster for this year delivers a more bullish read for the next.

The IEA reads the damage as a blockage rather than a collapse, oil that cannot reach buyers rather than demand that has vanished, so the deeper this year’s hole, the steeper the climb out of it once Hormuz reopens.

OPEC, which never accepted that consumption fell much, has less ground to make up for.

The agency’s outlook rests explicitly on de-escalation, assuming flows gradually recover and turning this year’s supply contraction into growth of 8.3 mb/d, flipping a 1.3 mb/d deficit into a 4.6 mb/d surplus.

Aug. 12 (UPI) — The International Energy Agency warned Wednesday of a sharp drop in global stocks oil amid renewed disruption to exports via the Hormuz Strait and Caspian Sea resulting in “lower volumes of oil” transiting the seas to markets around the world.

In its August Oil Market Report, the agency said measurable global oil inventories — strategic reserves, on tankers at sea — plunged by 69 million barrels in July to just under 7.9 million barrels, down from 410 million barrels per day at the start of the war at the end of February.

Onshore stocks declined by just 6 million barrels per day as the pace of IEA releases of its emergency stocks eased, even as China continued to draw down on its crude oil reserves.

“Although the market is projected to return to surplus towards the end of this year, risks remain substantial and the urgency of reopening the Strait has increased, as previously available inventory buffers are rapidly depleting,” the IEA said.

The IEA data comes two days after the U.S. Department of Energy said the country’s Strategic Petroleum Reserve had fallen to less than 300 million barrels in the previous week, its lowest level in 43 years — but still well above the 70 million barrel minimum for it to run as intended.

President Donald Trump ordered 172 million barrels to be released in March after exports from Gulf producers including Saudi Arabia Kuwait, Bahrain, and the UAE were severely curtailed by Iran closing the Strait of Hormuz.

Use of other routes to move oil and the drawing down of inventories, including China’s massive 1.4 billion barrel reserve which has seen a sharp drop in its oil imports, have so far helped ward off the damaging global oil shortage it was feared the closure of the Hormuz Strait would trigger.

The IEA also warned that the destruction of global demand for oil was escalating, driven by the continuing closure of the Strait of Hormuz and high fuel prices suppressing consumption, forecasting a 1.6 million barrels per day drop in demand in 2026, up from its previous estimate of 1 million barrels per day.

However, it said said the pace of market contraction would slow, down from a 4.9 million barrels per day decline in the second quarter to 2.8 million barrels per day drop in the third quarter, and return to growth in the final quarter, with expansion of global demand of 2.4 million barrels per day expected in 2027.

On the supply side, the IEA said overall production for 2026 would fall more sharply than demand, but would bounce back to outpace demand in 2027.

Production rose by 2.4 million barrels per day to 101.5 barrels per day in July, but remained well short of the 6.3 million barrels per day supply growth pace seen in July 2025, with 8.3 million barrels per day of Persian Gulf output “still shut in.”

“Renewed hostilities and maritime disruptions in July and early August undermined the recovery efforts, reducing projected third quarter 2026 oil supply by 1.7 million barrels per day compared with last month’s report.

“Global oil supply is now projected to decline by 4.3 million barrels per day on average in 2026 and rebound by 8.3 million barrels per day next year to 110.3 million barrels per day,” the IEA said.

Published on
10/07/2026 – 13:58 GMT+2

Global oil demand will fall by one million barrels a day in 2026, the IEA said on Friday, making it the first annual contraction since 2020, when Covid lockdowns grounded aviation and shuttered industry.

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The comparison flatters this year’s decline in one respect, since demand collapsed by around eight million barrels a day at the height of the pandemic, but it underlines how severely the closure of the Strait of Hormuz has damaged the global economy.

The contraction is “highly skewed in both product and regional terms”, the agency noted in its monthly report.

Earlier IEA analysis traced the sharpest losses to Asia’s import-dependent economies and to petrochemical feedstocks such as naphtha and liquefied petroleum gas, whose supply chains run through the Strait of Hormuz.

At the time of writing, the front month contract on Brent crude, the international benchmark, was trading at around $76 a barrel, roughly 6% higher than before the US and Israel launched strikes on Iran in late February, and far below the peaks near $120 reached in March at the height of the conflict.

The US benchmark, WTI, was trading lower at around $72 a barrel.

June’s fragile rebound

Supply improved sharply last month, if from a desperately low base.

Global production jumped by 4.1 million barrels a day in June to 98.8 million as the partial reopening of the Strait of Hormuz allowed Gulf producers to restart shut-in wells, though output was still running 9.4 million barrels a day beneath its pre-war level.

Gulf exports, counting cargoes rerouted around the strait, climbed by 6.5 million barrels a day to 16.1 million. Before the fighting began in late February, the region shipped an average of 24 million barrels.

Global oil inventories grew for the first time since US and Israeli strikes on Iran ignited the conflict, halting months of record drawdowns, although stockpiles in the wealthiest economies shrank further as buyers held back from importing.

The truce unravels

The IEA’s forecasts rest on an assumption now under visible strain which is that a ceasefire holds and the Strait of Hormuz gradually reopens.

On that basis, global supply would contract by 3.7 million barrels a day this year, leaving production 860,000 barrels a day short of demand, before expanding by 7.5 million next year and tipping the market into surplus.

Stronger output elsewhere and weaker demand than expected before the war could still restore a surplus by the end of the year, allowing countries to rebuild depleted reserves, the IEA noted.

This week brought the second and far larger breach of last month’s truce.

After Iranian forces struck three commercial vessels on Monday and Tuesday, US Central Command hit more than 80 targets across Iran, including air defences, coastal radar and over 60 Revolutionary Guard small boats, while Washington revoked the licence permitting Iranian oil exports.

Iran fired drones and missiles at Bahrain and Kuwait, causing no major damage, and US President Donald Trump has since declared the ceasefire over.

Tehran insists the only safe passage is the route it sets in the Strait of Hormuz as traffic fell to 13 tankers on Wednesday, against an average of 33 a day the previous week, according to shipping data from Kpler.

Additional sources • AFP