The IEA forecasts global oil demand to contract for the first time in six years in 2026 due to the Iran-Iran conflict.

The IEA forecasts global oil demand to fall by 1 million barrels per day in 2026, the first contraction in six years, following the impact of the Iran-Iran conflict on production and exports through the Strait of Hormuz.

On July 10, 2569 at 15.44:XNUMX p.m., CNBC news agency reported that The International Energy Agency (IEA) forecasts that global oil demand in 2569 will fall by 1 million barrels per day compared to the previous year. This would mark the first annual contraction since 2563 during the COVID-19 pandemic, primarily due to the war in Iran severely impacting oil production and exports in the Middle East.

In its latest oil market report, the IEA stated that the contraction in demand this year has been unbalanced, both in terms of product types and regions, primarily due to the closure of the Strait of Hormuz, a vital global shipping route for oil and natural gas, which has disrupted oil exports from the Persian Gulf.

Although the IEA sees signs of recovery, it warns that if the conflict intensifies again, the oil market outlook could face greater uncertainty.

The IEA's forecast is based on the assumption that the ceasefire will continue and the Strait of Hormuz will gradually reopen to normal operation. However, this assumption is being questioned after the US and Iran resumed their military confrontation this week, resulting in attacks on several ships and further slowing down shipping through the Strait of Hormuz.

The IEA states that while the global oil market is likely to return to a state of oversupply towards the end of the year, this forecast depends on the continued recovery of oil shipments through the Strait of Hormuz, allowing producers to restart production facilities and enabling refineries in the Middle East and other regions to resume normal oil product deliveries.

The IEA also warned that the renewed clashes in the Persian Gulf reflect the risks if all parties cannot reach a lasting peace agreement, which is a crucial condition for the oil market to return to normal.

refer : cnbc.com

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