IEA Predicts Fluctuations in Global Oil Demand and Supply

Aug 12, 2026

66 min

Aug 12, 2026 22:30

Global oil demand expected to decline by 1.6 mb/d in 2026, expand by 2.4 mb/d in 2027: IEA

## Oil Demand Trends

The International Energy Agency (IEA) forecasts a decline in global oil demand by 1.6 million barrels per day (mb/d) in 2026. This reduction is attributed to factors such as the closure of the Strait of Hormuz and high fuel prices. However, demand is expected to rebound in 2027, increasing by 2.4 mb/d.

## Quarterly Demand Changes

In 2026, oil demand is projected to contract significantly in the second quarter by 4.9 mb/d and by 2.8 mb/d in the third quarter. A recovery is anticipated in the fourth quarter with a growth of 580,000 barrels per day.

## Oil Supply Projections

Global oil supply is expected to decrease by 4.3 mb/d in 2026, reaching 102 mb/d. This decline is partly due to reduced output from the Middle East and Russia, despite some growth from the Americas. Supply is predicted to bounce back in 2027, increasing by 8.3 mb/d to 110.3 mb/d.

## Inventory and Market Balance

Observed oil inventories fell sharply in July, dropping by 69 million barrels. By the end of July, stocks were below 7.9 billion barrels, the lowest since April 2025. The market is expected to return to surplus towards the end of the year, but risks remain due to depleted inventory buffers and the ongoing closure of the Strait of Hormuz.

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