Global demand for oil is expected to fall more than forecast in 2026, pressured by the war with Iran, pricier fuels and deteriorating economic outlooks, according to the International Energy Agency (IEA).
In a monthly report released on Wednesday, the agency estimated an average drop of 2.6 million barrels per day (bpd) in global consumption this year, compared with the previous projection of a decline of 2.5 million bpd. For the fourth quarter, the IEA expects a 2.5 million bpd drop year over year.
Although demand is falling, the market is expected to remain in deficit through year-end, given constraints mainly in middle distillates, such as diesel. The IEA notes that diesel will account for about 25% of the 2026 demand decline and warns that the global availability of the product remains under strong pressure.
On the supply side, the IEA says the recovery remains “fragile” in the face of new attacks on energy infrastructure and tanker traffic in the Gulf. Global supply rose by 2.5 million bpd in September versus August, to 102.3 million bpd, driven by Gulf producers. Increases of 2.1 million bpd from OPEC+ were led by Saudi Arabia, while the United Arab Emirates spurred the rise among non-OPEC+ producers.
By contrast, in the 2026 average, the IEA estimates global supply will fall by 5.8 million bpd, to 100.7 million bpd, before turning up again in 2027, with a rise of 7.7 million bpd. The agency foresees only a partial recovery in demand next year, of about 2 million bpd, leaving global consumption in 2027 still 620 thousand bpd (0.6%) below the 2025 level.
The report also points to signs of tightening in inventories. Global stocks observed fell by 10 million barrels (mb) in September, with a further decline of 113 mb in onshore reserves partially offset by an increase in oil stored at sea. At the end of September, global stocks were 509 mb below pre-war levels, according to the IEA, and onshore reserves were at the lowest levels since at least 2016.
In refining, the IEA projects that global refinery throughput will reach a seasonal low of 81.3 million bpd in October and rebound to 84.6 million bpd by year-end. According to the agency, record freight and oil costs squeezed margins in Europe and Asia, while, in the United States, the use of discounted feedstock boosted margins to unprecedented levels.
The report also highlights the surge in prices in the physical market, with Dated Brent, the Brent benchmark in the spot market, rising by US$26.17 per barrel in September, to US$116.89, after renewed hostilities in the Middle East and accelerated purchases by Asian refiners. The IEA assesses that, without a resolution to the conflicts, the market could face further volatility in the coming months, before an eventual surplus materializes in 2027.
*Content generated with the aid of Artificial Intelligence, reviewed and edited by the Broadcast Editorial Desk, the real-time news system of Grupo Estado
