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The International Energy Agency (IEA) on Tuesday forecast a decline in global oil consumption for 2026, warning that the world is facing the "most severe oil supply crisis in history" following the loss of 10 million barrels per day (bpd) in March due to conflict in the Middle East.
In its monthly report, the IEA estimated that average global demand for crude will reach 104.26 million bpd in 2026, down from 104.34 million bpd in 2025. The agency revised its outlook to an average contraction of 80,000 bpd in 2026, a sharp pivot from its March report which had predicted growth of 730,000 bpd.
Consumption in the second quarter is expected to hit 102.07 million bpd, representing a year-on-year of 1.5 million bpd. The IEA noted this would be the largest such decline since the COVID-19 pandemic caused fuel consumption to collapse.
The report highlighted that the sharpest initial drops were observed in the Middle East and Asia-Pacific regions, particularly affecting jet fuel and liquefied petroleum gas (LPG). Global oil supply fell by 10.1 million bpd in March to settle at 97 million bpd, driven by ongoing attacks on energy infrastructure in Gulf nations and restrictions on shipments through the Strait of Hormuz.
Amid the supply crunch, Russia's revenues from crude exports doubled between February and March, surging from $9.7 billion to $19 billion. The IEA attributed this spike to soaring prices and increased exports of Russian crude and petroleum products.