World oil demand set for first annual decline since 2020, IEA says

Global oil demand will decline for the first time since 2020 as the Iran war hurts production and exports in the Middle East, the International Energy Agency (IEA) said on Friday.

In its latest oil market report, the IEA stated that world oil demand is expected to decrease by 1 million barrels on an annual basis in 2026, which would be the first annual decline since 2020, when the Covid-19 epidemic peaked.

The agency said this year’s contraction was “highly skewed in both product and regional terms” as the closure of the Strait of Hormuz, a vital shipping route for oil and gas, disrupted exports through the Persian Gulf.

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