From supply shock to oil glut: IEA flags scale of demand destruction caused by Iran war
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- In its latest monthly oil market report, the IEA slashed its 2026 demand outlook to 1.1 million barrels a day year-over-year in 2026.
- Global supply, meanwhile, slumped to 94.5 million barrels a day in May, down 600,000 barrels a day month-on-month.
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The oil supply shock caused by the Iran war has eroded global demand for crude — but a lasting resolution to the conflict could drive a surge in supply volumes and trigger a major oil overhang next year, the International Energy Agency said on Wednesday.
In its latest monthly oil market report, the IEA slashed its 2026 demand outlook to 1.1 million barrels a day year-over-year in 2026. That's a 700,000-barrel-per-day downgrade from last month's estimate, after deliveries plunged by 5 million barrels per day in the second quarter, the IEA said.