Overview
- The International Energy Agency said in its July report published Friday that global oil demand will fall by about 1.05 million barrels per day in 2026, the first annual decline since 2020, with a strong rebound penciled in for 2027 if transit recovery holds.
- June saw the largest monthly supply gain in months as shipments through the Strait of Hormuz resumed, but the IEA says output remains well below pre‑war levels and shipping is still vulnerable to renewed hostilities.
- Renewed U.S.–Iran military exchanges in early July have slowed tanker movements again and reintroduced a geopolitical risk premium that could upset the IEA’s recovery path if fighting intensifies.
- Governments and Asian buyers are preparing large rebuilds of strategic petroleum reserves depleted during the crisis, a process analysts say could add hundreds of thousands of barrels per day of demand through 2027–2028 and support price floors.
- Ukrainian strikes on Russian refineries and transport have prompted the IEA to cut Russia’s 2026–27 output forecasts, keeping refined fuels tighter than crude and complicating when gasoline and diesel markets will fully normalize.