Global Oil Demand Drops Sharply Amid Iran War
The International Energy Agency (IEA) has revised its global oil demand forecast for 2026 downward by 940,000 barrels per day, projecting a total decline of 2.5 million barrels per day — the second-largest annual drop in six decades after the pandemic. The war with Iran is cited as the primary cause behind rising crude prices and disrupted supply chains from Gulf producers. The impact on consumers has been significant: U.S. gasoline prices have surged to $4.33 per gallon, up sharply from $2.78 nine months ago, while West Texas Intermediate (WTI) crude climbed toward $97 a barrel in September. The refining system is under strain due to the lack of Gulf crude flows, and middle distillates like diesel are particularly affected. Retail sales have fallen for the first time since last fall, with consumer sentiment dropping below 60 — signaling potential recessionary conditions. U.S. military costs from the conflict now exceed $33.4 billion.
Topics: global economy IEA report Iran war impact oil demand