The IEA’s oil ‘demand destruction’ report comes after its chief stated unnamed international locations are hoarding shares.
Printed On 14 Apr 2026
The Worldwide Power Company (IEA) has sharply minimize its forecasts for world oil provide and demand progress, saying each are anticipated to fall from final 12 months’s ranges as the United States-Israel conflict on Iran disrupts oil flows and weighs on the worldwide financial system.
Based on its report printed on Tuesday, the IEA sees world oil demand falling by 80,000 barrels per day (bpd) this 12 months, in contrast with a projected year-on-year rise of 640,000 bpd in its earlier month-to-month report.
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The forecast was launched after the Worldwide Financial Fund, World Financial institution and IEA urged international locations on Monday to keep away from hoarding power provides and imposing export controls that would worsen the shock.
IEA chief Fatih Birol on Monday instructed reporters that a number of international locations had been holding onto shares and imposing export restrictions, and appealed to all international locations to let power shares stream to the markets. He didn’t title the international locations.
“Demand destruction will unfold as shortage and better costs persist,” the IEA report stated on Tuesday, including that the deepest cuts in oil consumption have come from the Center East and Asia Pacific thus far, for naphtha, LPG and jet gasoline particularly.
The Paris-based watchdog stated a projected 1.5 million bpd drop in demand within the second quarter of this 12 months would mark the deepest contraction because the COVID-19 pandemic.
On Monday, the Group of the Petroleum Exporting Nations (OPEC) lowered its prediction for world oil demand within the second quarter, however saved its full-year outlook unchanged.
Hormuz disruptions
Assaults on power infrastructure within the Center East and Iran’s closure of the Strait of Hormuz have led to the most important oil provide disruption in historical past, the IEA stated, with 10.1 million bpd misplaced in March.
Iran introduced visitors by the strait – a key route for world power shipments – to a near-total halt in response to US-Israel assaults on its territory since February 28.
The Iranian de facto management over the chokepoint despatched gasoline and petrol costs skyrocketing around the globe.
Now, Washington goals to take management of the strait from Tehran by making it unattainable for Iranian tankers, which have continued to move every day, to transit.
For this, US President Donald Trump introduced a blockade on Iranian ports on Sunday, after weekend peace talks in Pakistan’s capital, Islamabad, between the US and Iran failed to achieve a deal.
The IEA report stated the US blockade has additional clouded the outlook for world power safety and the availability of an enormous array of products that depend on petroleum.
Oil demand may plunge even additional if the strait stays closed, the IEA stated.
“On this case, power markets and economies around the globe have to brace for important disruptions within the months to return,” it warned.
“Resuming flows by the Strait of Hormuz stays the only most essential variable in easing the stress on power provides, costs and the worldwide financial system,” the IEA added.
Russia’s good points
It additionally famous {that a} chief beneficiary of the disruptions has been Russia. Because of the surge in costs, Moscow’s revenues from crude oil and refined merchandise rose in March, rebounding from February after they fell to their lowest stage because the begin of the all-out conflict on Ukraine in 2022.
Russia’s commodity revenues are an important a part of the state funds and are wanted to help rising army spending.
The IEA stated Russia’s crude oil exports rose by 270,000 bpd final month from February to 4.6 million bpd, principally pushed by larger seaborne shipments because the Druzhba pipeline remained offline.
Flows through the Druzhba pipeline to Hungary and Slovakia throughout Ukrainian territory have remained shut following the assaults on the pipeline infrastructure at the top of January.
