The International Energy Agency has sharply downgraded its forecasts for global oil supply and demand for the remainder of 2026, warning that the worldwide crude supply will fall by 4.3 million barrels per day this year. The revision marks a steep deterioration from the agency's July outlook, which had projected a 3.7 million bpd decline, as the crisis in the Middle East shaved 69 million barrels off global observable stocks in July alone.
Global demand is now expected to contract by 1.6 million bpd for the year, a downward revision of 550,000 bpd from prior estimates. Consumption fell 4.9 million bpd in the second quarter and is forecast to drop a further 2.8 million bpd in the third quarter before a modest rebound in the final months of the year. Total inventories have slipped below 7.9 billion barrels for the first time since April 2025.
The disruption stems from the late-February joint U.S.-Israeli air strikes on Iran, after which Tehran effectively blockaded shipping through the Strait of Hormuz. Persian Gulf exports swung from 20 million bpd in early July to roughly 12 million bpd by month's end. The IEA said supply is expected to recover in 2027, jumping 8.3 million bpd to 110.3 million bpd.