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Global Oil Demand Set to Fall Sharply in 2026 Amid Geopolitical Disruptions
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Firstpost•14-10-2026, 19:38
Global Oil Demand Set to Fall Sharply in 2026 Amid Geopolitical Disruptions
- •Global oil demand is projected to drop by 2.6 million barrels per day in 2026 due to the Iran war disrupting fuel supplies and weakening economic conditions.
- •Diesel will account for 25 per cent of the total demand decline, putting heavy pressure on tightening global inventories ahead of winter.
- •Global oil supply rose to 102.3 million barrels per day in September, driven by higher output from OPEC+ and Gulf producers.
- •Refinery margins in Europe and Asia are squeezed by higher shipping costs, while US margins hit record highs thanks to discounted crude.
- •Global oil stocks fell significantly, with inventories down 509 million barrels compared to the end of February.
Key Questions Answered
Global oil demand is expected to decline by 2.6 million barrels per day in 2026, with diesel accounting for 25 per cent of the drop, due to fuel shortages and economic pressures driven by the Iran war.
Global oil supply increased by 2.5 million barrels per day month-on-month to reach 102.3 million barrels per day in September, driven largely by higher output from Gulf producers and OPEC+ countries like Saudi Arabia.
The IEA expects global oil demand to recover by 2 million barrels per day in 2027, while global oil supply is forecast to rebound by 7.7 million barrels per day.
