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Informist, Wednesday, May 13, 2026

 

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--IEA: See global oil demand down by 420,000 bpd in 2026 at 104 mln bpd 
--IEA: See steepest decline in demand in Apr-Jun, down 2.45 mln bpd 
--IEA: Global oil suppy down 1.8 mln bpd in April 
--IEA: See global oil supply down 3.9 mln bpd in 2026 at 102.2 mln bpd 
--IEA: Strait of Hormuz closure depleting global oil stock at a record pace 
--IEA: Total supply loss from Gulf countries above 1 bln bbl 
--IEA: Current supply-demand gap significantly small as mkt was in surplus 
--IEA: High price, worsening economic scenario to weigh on oil consumption 
--IEA: Supply recovery to be slow if flows through Hormuz strait resume Q3 
--CONTEXT: International Energy Agency releases May oil market report

 

MUMBAI – The International Energy Agency has further lowered its forecast for global oil demand and supply this year with the closure of the Strait of Hormuz depleting global oil stocks at a record pace. The strait, through which around one-fifth of global energy supplies flow, has been practically shut for more than 10 weeks because of the war in West Asia.

 

The Paris-based intergovernmental organisation now expects global oil demand to fall by 420,000 barrels per day this year to 104 million barrels per day. Its earlier projection was of a fall of 80,000 barrels per day. It expects global oil supply to decline by 3.9 million barrels per day in 2026 to 102.2 million barrels per day, assuming flows through the Strait of Hormuz resume from June. Earlier, it was expecting global oil supplies to fall by 1.5 million barrels per day.

 

At the beginning of 2026, the organisation had projected a rise in both global oil demand and supply for the year. However, it altered its forecasts to a fall last month because of the war and the loss of supplies.

 

The agency expects the steepest decline in demand in the second quarter of 2026, with a fall of 2.45 million barrels per day. Of the fall, countries that are part of the Organisation for Economic Cooperation and Development will account for 930,000 barrels per day and non-OECD countries for 1.5 million barrels per day. The agency said global oil supply fell by a further 1.8 million barrels per day in April, taking the total loss of supply since February to 12.8 million barrels per day.

 

Crude oil production from countries in the Persian Gulf region is down by 14.4 million barrels per day from the pre-war level. The cumulative loss in supply from these countries has exceeded 1 billion barrels, "an unprecedented supply shock", the agency said. However, the current gap in supply and demand is significantly smaller as the global oil market was in a surplus before the crisis blew up.

 

Higher crude oil prices, a deteriorating economic environment, and demand-saving measures are expected to further weigh on global oil consumption, the agency said. While demand may swing back to growth towards the end of the year if a deal to end the war is agreed and the deal allows flows through the Strait of Hormuz to gradually resume from Jul-Sept, recovery in supply is likely to be slower. The global oil market is expected to remain in a deficit until the final quarter of the year, it said.

 

Saudi Arabia and the United Arab Emirates have successfully redirected some exports to terminals loading outside the strait. Observed global oil inventories, including oil on water, fell by 250 million barrels over March and April. "Producers outside of the Middle East (West Asia) also pushed output higher and lifted exports to record levels in response to the crisis," it said.

 

The agency has revised up the supply growth forecast from the Americas by over 600,000 barrels per day since the start of 2026 to 1.5 million barrels per day. "Russia's crude oil exports have also risen, as repeated attacks on its refineries have cut domestic use and led to higher shipments, while the United States temporarily waived sanctions on Russian oil on water," it said.

 

The International Energy Agency also sees further price volatility as we approach the peak summer demand period. At 1438 IST, the price of Brent Crude futures on the Intercontinental Exchange was down 0.3% from Tuesday at $107.41 per barrel. The price of West Texas Intermediate Crude futures on NYMEX was down 0.5% at $101.63 per barrel.  End

 

US$1 = INR 95.70

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Ashutosh Pati

Edited by Rajeev Pai

 

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