IEA Slashes 2026 Oil Demand Forecast by 730 kb/d Amid Supply Vulnerabilities

The IEA's latest Oil Market Report cuts its 2026 global oil demand outlook to a contraction of 80,000 barrels per day versus 2025, trimming 730 kb/d from last month's projection. It warns of severe demand destruction from persistent high prices, forecasting a potential 1.5 million b/d drop in 2Q26—the sharpest since COVID—while supply gaps from OPEC-9 underperformance and Strait of Hormuz disruptions leave the market exposed. Reports highlight a possible 'goldilocks' scenario for U.S. energy producers if Brent stabilizes above $80/bbl, balancing profits without triggering further structural losses.