Economic Buzz: Global oil demand to fall by 2.5M bpd in 2026; says IEA

The International Energy Agency (IEA) said in its monthly report on Friday that global oil demand is set to drop by 2.5 million barrels per day (bpd) in 2026, compared to 1.6 million bpd in its previous report. The agency cited the impasse in the war in Iran and said the losses will be driven by middle distillates and petrochemical feedstock products, especially in Asia. Oil demand is expected to increase by 2.6 million bpd in 2027.

The IEA added that global oil production fell by 1.6 million bpd to 100.1 million bpd in August, mainly due to continued output declines in the Gulf. Total oil supply is forecast to shrink by 5.7 million bpd to 100.7 million bpd this year, before rebounding by 8 million bpd in 2027. Global oil inventories depleted a further 95 million barrels in August, with total draws since February now up to 507 million barrels.

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