Istanbul, August 14 (HNA) – According to the International Energy Agency (IEA), global oil demand is expected to fall by 1.6 million barrels per day in 2026, as the ongoing closure of the Strait of Hormuz and high fuel prices continue to adversely affect oil consumption.
The IEA’s August 2026 Oil Market Report states: “This figure is 510,000 barrels per day higher than our forecast in last month’s Report. However, the annual contraction will ease from 4.9 million barrels per day in the second quarter of 2026 to 2.8 million barrels per day in the third quarter, before returning to growth in the final quarter. Global oil demand is forecast to rise by 2.4 million barrels per day in 2027,” it stated.
According to IEA data, global oil supply rose by 2.4 million barrels per day in July to reach 101.5 million barrels per day; however, it remained 6.3 million barrels per day below the levels of a year earlier due to the continued suspension of 8.3 million barrels per day of production in the Gulf region. The resurgence of hostilities in July and early August, coupled with disruptions to maritime transport, hampered recovery efforts and reduced the projected oil supply for the third quarter of 2026 by 1.7 million barrels per day compared with last month’s report. Global oil supply is forecast to fall by an average of 4.3 million barrels per day in 2026 and to rise by 8.3 million barrels per day next year, reaching 110.3 million barrels per day.
Refineries’ crude oil processing volumes increased further in July, but remained approximately 5 million barrels per day below the previous year’s levels, standing at 80.9 million barrels per day. Ongoing disruptions to product exports from the Middle East and attacks on Russian refineries have led to a further reduction of 370,000 barrels per day in processing volume forecasts for the third quarter of 2026. Global processing volumes are forecast to fall by an average of 2.5 million barrels per day in 2026 and to recover by 3.5 million barrels per day in 2027. Tightening in the light and middle distillate markets has pushed crack spreads and profit margins in the Atlantic Basin to record levels.
New disruptions to exports from the Gulf and the Caspian Sea have led to a sharp fall in the volume of oil transported by sea, resulting in a 69 million barrel decline in global observed oil stocks in July. Although the pace of the IEA’s emergency stock releases has slowed and the drawdown in China’s crude oil stocks has continued, onshore stocks fell by a modest 6 million barrels. Total observed oil stocks, hovering just below 7.9 billion barrels, have fallen by 410 million barrels since the start of the war; this equates to an average daily decline of 2.7 million barrels.
In July, benchmark crude oil prices traded within an exceptionally wide range of approximately $40 per barrel, influenced at times by geopolitical developments and tightening crude oil and product markets. In parallel, the spot differentials in West Texas Intermediate (WTI) and Brent futures contracts reverted to backwardation. North Sea Dated rose by $25.67 per barrel during July, closing the month at $96.80 per barrel, and was trading at around $92 per barrel at the time of writing.
The IEA Oil Market Report (OMR) is one of the world’s most authoritative and timely sources of data, forecasts and analysis on the global oil market – including detailed statistics and commentary on oil supply, demand, inventories, prices and refining activity, as well as oil trade for IEA and selected non-IEA countries.