The IEA cut its global oil demand outlook, citing continued Strait of Hormuz
export disruptions and sustained high fuel prices. It now expects 2026 demand to
fall 1.56 mln b/d YoY — about 0.51 mln b/d lower than its prior forecast — to
103.29 mln b/d. The agency sees Q2 demand down 4.90 mln b/d YoY, with the
decline narrowing to 2.80 mln b/d in the current quarter and reversing to growth
of roughly 0.58 mln b/d in Q4. Assuming a de‑escalation between the US and Iran
and gradual supply restoration, the IEA forecasts 2027 demand will rise 2.40 mln
b/d to 105.7 mln b/d. It says restored flows through the Strait of Hormuz would
convert an expected 2026 supply shortfall of about 4.30 mln b/d into a 2027
surplus of roughly 8.30 mln b/d, shifting the market from a 1.30 mln b/d deficit
in 2026 to a 4.60 mln b/d surplus in 2027.
