The International Energy Agency on Tuesday projected that global oil demand will see its sharpest decline since the Covid-19 pandemic, as the largest disruption to global oil supplies stemming from the Iran war will trigger major “demand destruction” due to scarcity and high prices.
Oil tankers and cargo ships line up in the Strait of Hormuz as seen from Khor Fakkan, United Arab Emirates.
In its monthly oil market report released on Tuesday, the agency projected that oil demand will decline by 80,000 barrels per day (bpd) this year, compared with its earlier forecast of a 640,000 bpd increase.
The agency said that so far, the biggest cuts in oil usage have been reported in the Middle East and the Asia Pacific region—“mainly for naphtha, LPG and jet fuel.”
However, this “demand destruction” is expected to spread widely as “scarcity and higher prices persist.”
