IEA: 2026 Oil Demand Seen Down 80K Bpd on Iran War


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- The International Energy Agency (IEA) on Tuesday 
(4/14) slashed its global oil demand forecast by 720,000 bpd from March 
estimates to project an annual decline of 80,000 bpd as the Iran war disrupts 
sales.

   "The conflict has triggered the largest supply disruption in the history of 
the global oil market," the IEA said, noting particularly halted shipping 
through the Strait of Hormuz, which normally carries around 20 million bpd of 
petroleum liquids, or 20% of world supply.

   The agency reported that Middle East and Asia-Pacific regions were seeing 
the deepest consumption cuts, specifically for naphtha, LPG, and jet fuel. A 
projected 1.5 million bpd demand drop in the second quarter would be the 
sharpest contraction since the COVID-19 pandemic.

   Global oil output is expected to fall by 1.5 million bpd on average this 
year. This marks a 2.6 million bpd swing from previous growth forecast as 
attacks on oil infrastructure strikes and the Hormuz closure hit oil supply.

   The effective closure of the strait caused a 10.1 million bpd supply loss in 
March. Loadings of crude, natural gas liquids, and refined products averaged 
just 3.8 million bpd in early April, down from 20 million bpd in February.

   Alternative export routes through Saudi Arabia, the UAE, and Turkey have 
increased to 7.2 million bpd. However, the net loss in regional exports still 
exceeds 13 million bpd, forcing producers to shut in significant production.

   IEA member countries released 400 million bbl from emergency reserves on 
March 11 to mitigate the shock. Despite this, the agency warned that physical 
crude prices have surged near $150 bbl, creating an acute disconnect with 
futures markets.

   The agency's base case assumes regular Middle East deliveries will resume by 
mid-year. A more severe alternative scenario warns that prolonged conflict 
could draw down 2 billion bbl from global stocks.

   Resuming flows through the Strait of Hormuz is considered the most critical 
variable for easing global economic pressure. The IEA estimates it will take 
approximately two months for export volumes to stabilize once the waterway 
eventually reopens.




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