Global Oil Demand Shows Signs of Recovery
The International Energy Agency (IEA) reported today that global oil demand is beginning to recover, aided by a gradual resumption of supply flows through the Strait of Hormuz and a decline in crude oil prices. In its monthly report, the agency noted that global oil consumption is on the mend and is expected to rise from the record lows seen in May. Initially, the IEA had projected a decline in demand by 1.1 million barrels per day for the year 2026 due to the ongoing conflict in the Middle East, which had disrupted shipping through the Strait of Hormuz. However, this forecast has since been adjusted to a decrease of one million barrels per day.
Supply Increases Amid Ongoing Global Challenges
The agency highlighted a significant increase in global crude supply, which rose sharply by approximately 4.1 million barrels per day, reaching 98.8 million barrels per day in June. This increase is attributed to the resumption of flows through the Strait of Hormuz, contributing to a partial recovery in oil production in the Gulf region. Nevertheless, global production remains down by about 9.4 million barrels per day compared to pre-war levels. Additionally, total oil exports from the Gulf region rose by 6.5 million barrels per day to 16.1 million barrels per day in June, yet this figure remains significantly lower than the average of 24 million barrels recorded before the onset of the conflict.
Globally, total oil supply improved to 102.6 million barrels per day in June, and is projected to continue rising if a rapid de-escalation of renewed tensions occurs. Should transit through the strait improve, global oil supplies could increase by 7.5 million barrels per day next year. The report also indicated that global oil inventories have risen for the first time since the outbreak of the conflict in the region on February 28. However, it noted that inventories in wealthy industrialized nations have decreased despite increased maritime shipments, attributed to a continued decline in oil imports.
Despite the significant drop in oil prices during June, the IEA cautioned that renewed conflict between the United States and Iran this week could disrupt forecasts, emphasizing the risks associated with the lack of a permanent peace agreement, which is essential for returning oil markets to normal conditions.
As reported by hespress.com.
