IEA Warns Hormuz Crisis Could Trigger First Global Oil Demand Contraction Since Pandemic

The International Energy Agency is warning that the ongoing disruption in the Strait of Hormuz is triggering one of the largest oil market shocks in modern history, with global oil demand now expected to contract in 2026 as supply losses accelerate and inventories drain at record pace.

In its latest Oil Market Report released Tuesday, the IEA said world oil demand is forecast to decline by 420,000 barrels per day year-over-year in 2026 to 104 million barrels per day — a sharp reversal from pre-war expectations and one of the few annual contractions outside major global crises. 

The agency said the