IEA cuts 2026 oil demand forecast as Hormuz stays shut

The International Energy Agency cut its forecast for 2026 global oil demand again on Wednesday, saying the continued closure of the Strait of Hormuz and high fuel prices were weighing on consumption.

The Paris-based agency now expects demand to fall by 1.6 million barrels per day, compared with a one million-barrel-per-day decline in its previous monthly report in July.

“The ongoing closure of the Strait of Hormuz and elevated fuel prices continue to weigh on oil consumption,” the IEA said.

The strait usually carries around one-fifth of global oil supplies. Only a handful of ships are being let through despite repeated claims that a deal to open the route was imminent, contributing to volatile global oil prices.

The IEA said global supplies rose by 2.4 million barrels per day in July to 101.5 million barrels per day, but remained 6.3 million barrels per day lower than a year earlier. It said renewed hostilities and maritime disruptions in July and early August had undermined recovery efforts.

The agency now expects global supply to fall by 4.3 million barrels per day on average this year before recovering next year. On demand, it projects a return to growth in the fourth quarter.