The International Energy Agency worsens its forecasts on the oil market
Tensions in Hormuz foreshadow a drop in supply and rise in prices
BarcelonaThe International Energy Agency (IEA) has substantially revised downwards its expectations for global oil demand and supply in 2026 due to the lack of an agreement to reopen the Strait of Hormuz. The current situation has shattered the positive expectations from a month ago, which will keep crude oil prices high, while reserves have fallen to lows since April 2025.
"The new disruptions in the Strait of Hormuz have slowed the recovery of oil markets, underscoring the urgency of reopening it," stated the agency affiliated with the Organisation for Economic Co-operation and Development (OECD) in its August bulletin, where it warned that the markets for diesel, jet fuel, and gasoline have contracted due to the decrease in exports from Gulf countries and Russia, coinciding with the increase in travel demand during the summer.
The IEA forecasts that global oil demand will decrease by 1.6 million barrels per day (mb/d) in 2026, representing a drop of 510,000 more barrels per day than estimated a month ago, "due to the continued closure of the Strait of Hormuz and high fuel prices." Nevertheless, the agency is confident that the contraction will moderate as the year progresses: it will go from 4.9 mb/d in the second quarter of 2026 to 2.8 mb/d in the third, before resuming growth in the last quarter. Therefore, it anticipates that global oil demand will increase by 2.4 mb/d in 2027.
Regarding supply, while it highlights that it increased by 2.4 mb/d in July, reaching 101.5 mb/d, the IEA has stressed that it remained 6.3 mb/d below the previous year's levels, with 8.3 mb/d of production from the Gulf still paralyzed. "The resumption of hostilities and maritime disruptions in July and early August undermined recovery efforts," which is why it has cut its oil supply projection and now estimates an average decrease of 4.3 mb/d in 2026, to 102 mb/d, although it is confident in a rebound next year of 8.3 mb/d, reaching 110.3 mb/d.
Reserves are depleting
For their part, observed global oil stocks plunged by 69 million barrels in July as a result of new export disruptions from the Persian Gulf and the Caspian Sea, leading to a drastic decrease in the volume of oil in transit.
Thus, by the end of July, observed stocks had fallen below 7.9 billion barrels for the first time since April 2025, after registering an accumulated reduction of 410 million barrels or 2.7 mb/d between the end of February and the end of July.
"While the market is expected to return to surplus by the end of this year, risks remain considerable and the urgency to reopen the strait has increased as available stocks are rapidly depleting," the IEA warned.
