Global oil demand is expected to decline sharply in 2026, as escalating tensions in the Middle East disrupt supply and weigh on consumption. In its latest report, the International Energy Agency forecasts a decrease of 80,000 barrels per day on average.
This would mark the steepest drop since the COVID-19 pandemic, with the agency warning of an “unprecedented oil supply shock”. The market has already felt the impact, with a loss of around 10 million barrels per day recorded in March.
The revised outlook contrasts sharply with earlier projections, which had anticipated demand growth. Global consumption is now expected to average 104.26 million barrels per day in 2026, slightly down from 104.34 million in 2025.
The decline is set to intensify in the second quarter, when demand is projected to fall to 102.07 million barrels per day, representing a year-on-year drop of 1.5 million barrels per day, the largest since the pandemic.
According to the International Energy Agency, the most significant decreases are observed in the Middle East and the Asia-Pacific region. Key affected products include aviation fuel and liquefied petroleum gas, widely used for cooking.
The agency warns that the downturn could deepen further as shortages persist and prices continue to rise.
At the same time, global oil supply dropped by 10.1 million barrels per day in March to reach 97 million barrels per day. This sharp contraction is attributed to ongoing attacks on energy infrastructure in the Middle East and continued restrictions on tanker traffic through the strategic Strait of Hormuz, leading to what is described as the largest disruption in oil market history.
