IEA Forecasts Smaller Drop in 2026 Oil Demand as Consumption Picks Up

The International Energy Agency on Friday projected a smaller decline in global oil demand in 2026 amid signs of a rebound in consumption as crude flows improve. The agency now expects oil consumption to fall by 1 million barrels per day this year, compared with a 1.1 million-barrel drop forecast in June. That would mark the first annual contraction since 2020, CNBC reported. "A recovery in world oil demand is underway, with consumption set to rise from its May nadir on seasonal trends and as pent-up demand is released in line with a rebound in product supplies," the IEA said in its latest monthly oil market report. "The upswing in fuel use during the peak summer travel season is set to get an additional boost from the release of pent-up demand." The IEA projects annual demand contractions to ease in the third quarter to 1.7 million barrels per day from 4.8 million barrels in the second quarter. It sees consumption rising by 1.2 million barrels per day in the final quarter of 2026. The IEA anticipates global consumption to be up by more than 8 million barrels per day by October from May's low point, when demand declined by 5.3 million barrels per day year over year. The.