Trending
Global & Economy
Source: Newsmaker.id
The International Energy Agency (IEA) has lowered its global oil demand projections and warned that consumption may need to fall further in the coming months if the conflict involving Iran persists and supplies remain constrained.
The IEA estimates a drop in global oil demand of approximately 2.5 million barrels per day (bpd) for the year, following a downward revision of 940,000 bpd. This decline represents one of the largest annual contractions since the 2020 COVID-19 pandemic.
Despite weakening demand, market conditions have tightened due to even more severe supply disruptions. The IEA projects an average global oil deficit of 1.7–1.75 million bpd this year, up from an earlier estimate of 1.3 million bpd.
Global supply is projected to contract by approximately 5.7 million bpd, following a further downward revision of 1.3 million bpd. Global oil inventories continue to deplete, with stocks falling by about 2.8 million bpd between February and August. The IEA assesses that a supply surplus—previously expected to emerge later this year—may now not return until 2027.
The greatest pressure is evident in middle distillates, such as diesel, and petrochemical feedstocks in Asia. These conditions coincide with Brent crude trading near US$107 per barrel, driven by escalating US-Iran tensions and Houthi-Saudi hostilities that have raised concerns regarding Red Sea supply routes.
Newsmaker Analysis: The IEA report indicates that the primary issue facing the oil market is no longer merely demand, but rather deep-seated supply disruptions. Even as consumption weakens, the deficit continues to widen because production and exports are falling at a faster rate. As long as the conflict involving Iran and shipping route disruptions continue, Brent prices could remain elevated, even as global demand begins to adjust. (arl)
Source: Newsmaker.id