Global Oil Inventories Are Collapsing at Record Pace, IEA Warns

The International Energy Agency says the ongoing Strait of Hormuz crisis is triggering one of the most severe oil market disruptions in modern history, with global oil demand now expected to contract in 2026 as supply losses mount and inventories collapse at a record pace.

In its latest monthly Oil Market Report released Thursday, the IEA said global oil demand is now forecast to decline by 420,000 barrels per day year-over-year in 2026 to 104 million barrels per day—roughly 1.3 million barrels per day lower than the agency’s pre-war forecast.

The sharpest declines are expected during the second quarter,