IEA cuts 2026 oil demand to 102.4 mb/d as diesel stays scarce

The International Energy Agency (IEA) said in its October Oil Market Report, published on 14 October, that world oil demand will fall by 2.6 mb/d this year to 102.4 mb/d. A day later, the IEA Governing Board agreed to speed up the remaining emergency oil stock releases, with diesel first.

Demand, supply and prices

The IEA expects demand to fall by 2.5 mb/d year on year in the fourth quarter of 2026, after drops of 5 mb/d in the second quarter and 3.7 mb/d in the third. It links the fall to the Iran war, restricted product availability, high fuel prices and a weaker economic outlook, and says diesel accounts for 25% of the drop.

World oil supply rose by 2.5 mb/d in September to 102.3 mb/d, led by Gulf producers. Crude exports from the Gulf rose by 4.4 mb/d to 13.9 mb/d, and total oil flows through the Strait of Hormuz rose by 3.7 mb/d to 10.9 mb/d. The agency left its projections for the rest of the year largely unchanged because of renewed attacks in the region in October. For the full year it expects supply to fall by 5.8 mb/d to 100.7 mb/d.

North Sea Dated crude rose by $26.17/bbl in September to $116.89/bbl, and was trading around $134/bbl when the report was written. The report says Brent futures were around $107/bbl, up 13% since the start of September. Global diesel prices have come off the record highs of more than $200/bbl reached in September but remain nearly double the price of crude, according to the IEA.

Global observed oil inventories fell by 10 mb in September. The IEA expects the market to stay in deficit to the end of the year, with tight middle distillate supply likely to last well into 2027.

Emergency stocks

At its meeting on 15 October, the Governing Board noted that about 330 million barrels have been released so far under the Collective Action agreed in March 2026 in response to the Strait of Hormuz crisis. It agreed to complete the remaining releases of around 100 million barrels and to accelerate them, including more than 20 million barrels of diesel as soon as possible. Some members have released more than they pledged, so total releases will exceed the original 400 million barrels.

What happens next

The IEA Secretariat will keep monitoring the releases and will report to G7 Leaders and the Governing Board on any further action, based on an updated oil market assessment focused on diesel. For the factors that drive crude prices, see our guide to what moves oil prices.