Paris: The International Energy Agency (IEA) has revised its forecast, now predicting a decline in global oil demand by 1 million barrels per day in 2026. This adjustment contrasts with its mid-June forecast, which anticipated a 1.1 million-barrel-per-day decline.

According to Qatar News Agency, the IEA's monthly report released today highlights that in June, global oil supply averaged 98.8 million barrels per day. The agency projects this figure to reach 102.6 million barrels per day in 2026, assuming a rapid resolution of current geopolitical tensions.

The IEA noted a recovery in global oil demand, with expectations for a less severe decline in consumption during 2026 than previously forecast. This adjustment follows the market's lowest point in May and is attributed to the partial resumption of shipping through the Strait of Hormuz after a ceasefire agreement on June 17. Despite this recovery, production remains significantly below pre-war levels in the Middle East, with a shortfall of about 9.4 million barrels per day.

The report also mentioned an increase in global oil inventories for the first time since the Middle East conflict began, with a rise of 21 million barrels in June as sea transit volumes surged. Conversely, inventories within the Organisation for Economic Co-operation and Development (OECD) member countries decreased by 62 million barrels during the same period.

Outside of OECD countries, crude oil inventories also fell by 37 million barrels, largely due to China drawing down 41 million barrels from its onshore stockpiles amidst historically low import levels. The IEA highlighted that refining margins reached a four-year peak in July, driven by increased crude oil supplies that lowered oil prices despite ongoing pressure in refined product markets.