{"id":22489,"date":"2026-08-12T16:44:31","date_gmt":"2026-08-12T10:59:31","guid":{"rendered":"https:\/\/eng.dragonmedia.com.np\/?p=22489"},"modified":"2026-08-12T16:44:31","modified_gmt":"2026-08-12T10:59:31","slug":"iea-cuts-2026-global-oil-demand-forecast-amid-hormuz-closure-and-high-fuel-prices","status":"publish","type":"post","link":"https:\/\/eng.dragonmedia.com.np\/?p=22489","title":{"rendered":"IEA Cuts 2026 Global Oil Demand Forecast Amid Hormuz Closure and High Fuel Prices<\/strong>"},"content":{"rendered":"

Dragon Media News Desk<\/strong><\/p>\n

The International Energy Agency (IEA) has projected that global oil demand will decline by 1.6 million barrels per day in 2026, citing the continued closure of the Strait of Hormuz and elevated fuel prices that are putting pressure on consumption.<\/p>\n

In its August Oil Market Report released on Wednesday, the IEA lowered its demand outlook by a further 510,000 barrels per day compared with its July estimate. The report said disruptions in the Strait of Hormuz have affected international supply chains and constrained petroleum availability, while high fuel prices are further weighing on consumption.<\/p>\n

The IEA nevertheless expects demand to return to growth in the final quarter of 2026. Global oil demand is projected to increase by 2.4 million barrels per day in 2027.<\/p>\n

Global oil supply rose by 2.4 million barrels per day in July from the previous month, reaching 101.5 million barrels per day. However, this remained 6.3 million barrels per day below the level recorded a year earlier.<\/p>\n

Oil production in the Gulf increased by 2.5 million barrels per day in July to 23.9 million barrels per day, following a rise of 3.7 million barrels per day in June. Despite the recovery, production remained 8.3 million barrels per day below pre-war levels, according to the IEA.<\/p>\n

Renewed hostilities and maritime disruptions in July and early August undermined efforts to restore production and supply. As a result, the IEA cut its forecast for global oil supply in the third quarter of 2026 by 1.7 million barrels per day compared with its previous report.<\/p>\n

With no agreement yet in place to reopen the Strait of Hormuz and ensure unhindered transit through the Bab el-Mandeb Strait, the agency also lowered its supply forecasts for the remainder of the year.<\/p>\n

According to the IEA, global oil supply is expected to fall by an average of 4.3 million barrels per day in 2026 to around 102 million barrels per day. Additional production from the Americas is not expected to fully offset supply losses from the Middle East and Russia.<\/p>\n

Geopolitical developments have also had a visible impact on oil prices. Benchmark crude prices climbed to a two-month high in July after the collapse of the mid-June Iran\u2013U.S. ceasefire agreement disrupted the recovery of Gulf oil supplies.<\/p>\n

Crude oil prices traded within an unusually wide range of about 40 U.S. dollars per barrel during July. The IEA said sharp shifts in diplomatic expectations contributed to significant price volatility.<\/p>\n

The agency said supply disruptions and high fuel prices are continuing to put downward pressure on global oil consumption. Uncertainty over supply, prices and demand is expected to persist as long as the Strait of Hormuz and other major maritime routes remain disrupted.<\/p>\n

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