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LoginIEA Forecasts Global Oil Supply to Plunge Below Demand in 2026
Paris, May 13 (QNA) - The International Energy Agency (IEA) has predicted a decline in global oil demand in 2026, averaging 104 million barrels per day, which is 1.3 million barrels per day lower than the pre-war forecast.
According to its monthly Oil Market Report, the IEA anticipates that the sharpest drop will occur in the second quarter of 2026, amounting to 2.45 million barrels per day. This includes 930,000 barrels per day in OECD countries and 1.5 million barrels per day in non-OECD countries.
The petrochemical and aviation sectors are currently the most affected, but rising prices, weaker economic conditions, and energy-saving measures are expected to reduce fuel consumption further, the report adds.
Global oil supply fell by another 1.8 million barrels per day in April, bringing total production down to 95.1 million barrels per day, which brings the net losses since February to 12.8 million barrels per day.
Conversely, increased production and exports from countries in the Atlantic Basin have helped offset some of the losses. If oil flows through the Strait of Hormuz gradually restarts from June, global oil supply is expected to decline by an average of 3.9 million barrels per day in 2026, reaching 102.2 million barrels per day.
Refinery crude activity is expected to also drop sharply by 4.5 million barrels per day in the second quarter of 2026, reaching 78.7 million barrels per day due to damaged infrastructure, export restrictions, and reduced crude oil supplies.
Despite this, refining profit margins remain unusually high because of strong demand for middle distillates. Global oil inventories fell by 129 million barrels in March and by another 117 million barrels in April, according to early data. Ongoing disruptions to oil shipments through the Strait of Hormuz caused onshore oil stocks to decline by 170 million barrels in April. At the same time, the amount of oil stored offshore increased by 53 million barrels. (QNA)
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