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Two of the most influential voices in energy markets set out opposing readings of the year on Wednesday.
The IEA now expects the world to burn less oil in 2026 than it did in 2025, its first such call since Covid-19 ground the global economy to a near-halt, while OPEC still pencils in growth, leaving them more than two million barrels a day apart.
The Paris-based IEA now expects global oil demand to fall by 1.6 million barrels per day (mb/d) in 2026, a downgrade of 510,000 b/d from July.
“The ongoing closure of the Strait of Hormuz and elevated fuel prices continue to weigh on oil consumption,” it said, cutting its second-half forecast by roughly 550,000 b/d.
OPEC still expects demand to grow, though its estimate has been trimmed for a fourth consecutive month, to 580,000 b/d from 780,000 b/d.
The producer group has consistently argued the war has done less damage to consumption than Western forecasters believe, and the two sets of numbers imply a difference of about 2.2 mb/d in what the world will burn this year.
Supply still 6.3 million barrels short
The supply picture explains the pessimism.
Global production rose by 2.4 mb/d to 101.5 mb/d in July but remained 6.3 mb/d below year-earlier levels, with 8.3 mb/d of Gulf output still shut in.
Gulf production climbed to 23.9 mb/d, yet regional exports fell 2.1 mb/d to 15 mb/d after the Strait of Hormuz was effectively closed again in early July and tankers and infrastructure came under attack, with loadings sliding from 20 mb/d to around 12 mb/d.
With no deal to reopen the waterway or secure passage through Bab el-Mandeb, the IEA cut its supply forecasts again and now expects output to fall by 4.3 mb/d this year.
Observed global stocks also dropped by 69 million barrels in July to just under 7.9 billion, down 410 million since the war began.
Both bet on 2027
Where the two agree is next year.
OPEC now expects demand to grow by 2.2 mb/d in 2027, an upgrade from the 1.94 mb/d it forecast last month, while the IEA goes further still at 2.4 mb/d.
That is an inversion worth highlighting, as the gloomier forecaster for this year delivers a more bullish read for the next.
The IEA reads the damage as a blockage rather than a collapse, oil that cannot reach buyers rather than demand that has vanished, so the deeper this year’s hole, the steeper the climb out of it once Hormuz reopens.
OPEC, which never accepted that consumption fell much, has less ground to make up for.
The agency’s outlook rests explicitly on de-escalation, assuming flows gradually recover and turning this year’s supply contraction into growth of 8.3 mb/d, flipping a 1.3 mb/d deficit into a 4.6 mb/d surplus.