Oil demand is expected to contract by 80 kb/d this year, as the Iran war upends the International Energy Agency's (IEA's) global outlook. This is 730 kb/d less than in last month’s report and a forecast 1.5 mb/d 2Q26 decline would be the sharpest since Covid-19 slashed fuel consumption. Initially, the deepest cuts in oil use have come in the Middle East and Asia Pacific, mainly for naphtha, LPG and jet fuel. However, demand destruction will spread as scarcity and higher prices persist.
