IEA cuts global oil demand forecast by 2.5 million bpd amid escalating regional conflicts
The International Energy Agency sharply reduced its global oil demand outlook this year, citing stalled diplomatic efforts with Iran and disruptions in key shipping chokepoints.
The International Energy Agency warned that the global oil refining system is stretched to the limit due to the ongoing wars in Iran and Ukraine. In its latest monthly report, the organization cut its global oil demand forecast for 2026 by 2.5 million barrels per day (bpd), a significant increase from its August prediction of a 1.6 million bpd decline. The agency stated that world supply is expected to fall by 5.7 million bpd in 2026, roughly six percent lower than the previous year. This downward revision occurs as diplomatic talks between the United States and Iran remain impasse, delaying potential truces. Consequently, renewed attacks in the Strait of Hormuz and the Bab el-Mandeb passage are disrupting supply flows. Despite this global contraction, Nigeria's crude oil output rose by 35,000 bpd to 1.573 million bpd in August 2026, reaching its highest monthly level for that year. Across OPEC, total production increased by 346,000 bpd to 24.081 million bpd, driven largely by a surge in Iraqi output of 664,000 bpd. Meanwhile, Nigeria's Dangote refinery secured at least 520,000 barrels per day of Nigerian crude for October arrival from the National Petroleum Company and tender sales, preparing for its initial public offering.
