By Oluwakemi Kindness
The International Energy Agency has sharply cut its forecast for global oil demand this year, citing the continued closure of the Strait of Hormuz and high fuel prices.
The IEA now expects oil demand to fall by 1.6 million barrels per day in 2026.
That is significantly higher than its previous forecast of a one-million-barrel-per-day decline issued in July.
The agency said the disruption in the Strait of Hormuz and elevated fuel prices are weighing heavily on global oil consumption.
The waterway normally carries about one-fifth of the world’s oil supplies.
Traffic through the strait remains severely restricted despite claims of a ceasefire and repeated expectations that it would reopen.
The limited movement of ships has contributed to volatility in global oil prices.
The IEA said global oil supplies increased by 2.4 million barrels per day in July to 101.5 million barrels per day.
However, supply remained 6.3 million barrels per day below the level recorded a year earlier.
The agency said renewed hostilities and maritime disruptions in July and early August had undermined efforts to restore supplies.
It now expects global oil supply to decline by an average of 4.3 million barrels per day this year.
The IEA expects supply to recover next year.
Despite the sharp decline in demand, the agency forecasts a return to global oil demand growth in the fourth quarter of 2026.
