The International Energy Agency (IEA) has further reduced its forecast for global oil demand, now expecting consumption to fall by 2.5 million barrels a day in 2026 compared to its previous projection. This downward revision reflects ongoing concerns about U.S.-Iran tensions disrupting energy markets and delaying oil flow recovery into next year. The energy watchdog cited geopolitical instability as a key factor weighing on demand growth, particularly in regions vulnerable to supply chain interruptions.

The IEA’s updated outlook underscores the sensitivity of global energy markets to international conflicts and sanctions regimes. Analysts warn that prolonged uncertainty could suppress investment in oil infrastructure and accelerate shifts toward alternative energy sources. The report highlights how macroeconomic and geopolitical pressures are reshaping long-term energy trends, even as short-term volatility persists.