IEA: World Oil Demand to Dip 1M bpd in 2026, Most in 6 Yrs


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Global oil demand is projected to drop by 1 million 
bpd year-on-year in 2026, marking the first annual decline since 2020, the 
International Energy Agency (IEA) reported Friday (7/10).

   Global supply rebounded by a sharp 4.1 million bpd to 98.8 million bpd in 
June following a mid-month ceasefire agreement between the U.S. and Iran, the 
IEA said in its monthly report. However, overall production remained 9.4 
million bpd below pre-war levels after previous hostilities disrupted nearly 14 
million bpd of flows.

   The IEA warned that the fragile supply recovery could quickly reverse if 
shipping on the Strait of o Hormuz faces more disruptions.

   "Renewed exchanges of fire in the Gulf this week highlight the risks of not 
reaching a lasting peace agreement, which is a must for the normalisation in 
oil markets," the IEA noted. Both the U.S. and Iran announced an end to the 
ceasefire this week as clashes resumed.

   Annual demand contractions are set to ease from 4.8 million bpd in the 
second quarter to 1.7 million bpd in the third quarter. The agency expects a 
demand expansion of 1.2 million bpd in the fourth quarter.

   Global refinery runs rose by 1.5 million bpd in June, though volumes 
remained down 6 million bpd year-on-year. Refinery activity is projected to 
decline by 2.4 million bpd for the full year of 2026.

   Global observed oil inventories grew by 21 million bbl in June, marking the 
first monthly increase since the conflict began. Oil on water expanded by 117 
million bbl, offsetting an onshore inventory draw of 96 million bbl.

   Brent crude fell from a four-year high above $126 bbl in April to beneath 
$72 in June, before rebounding above $80 this week. On Friday, it hovered at 
around $72.




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