IEA: Oil demand set to shrink by 2.7M barrels a day in 2026

Global oil demand will shrink by 2.7 million barrels per day in 2026, according to the International Energy Agency's November Oil Market Report, published Friday. That puts total consumption at 102.3 million bpd. The agency sees a rebound of 2 million bpd in 2027, which it credits to supply chains normalising.

The worst of the drop may already be passing. The IEA expects the contraction to ease in the fourth quarter, with demand down 2.7 million bpd year-on-year after averaging a decline of 4.4 million bpd across the two preceding quarters.

The report points the finger at the Gulf. Exports of refined products and LPG from the region are still running at roughly half their pre-war levels, and the IEA says high fuel prices are piling on pressure. Together, those factors keep global demand weighed down.

Petrochemical feedstocks take the spotlight in the recovery story. The products hit hardest by the war will drive almost 80% of the 2027 gains, the report showed. Road fuels tell a different tale, with high prices, electrification and fuel efficiency across the global vehicle fleet holding back the rebound.