Mumbai, July 11: The International Energy Agency (IEA) has reported that global crude oil demand is beginning to recover. In May, oil demand fell to 97.9 million barrels per day, a decrease of 5.3 million barrels per day compared to the previous year. However, the agency estimates that by October, global oil demand will increase by more than 8 million barrels per day from May’s low, surpassing levels seen in 2025 for the first time since February.
According to the IEA’s latest ‘Oil Market Report’, increased travel during the summer is expected to boost fuel demand. Additionally, the return of previously suppressed demand will further enhance oil consumption.
However, the agency predicts a potential decline of 1 million barrels per day in global oil demand in 2026, followed by an expected increase of 2 million barrels per day in 2027.
The IEA noted that by the end of the year, the global oil market could see supply exceed demand. This forecast hinges on whether the movement of oil tankers through the Strait of Hormuz gradually normalizes. If this occurs, oil-producing countries will be able to increase production, and refineries in the Middle East and other regions can resume normal supply of petroleum products.
The agency highlighted that recent gunfire in the Gulf region underscores the difficulty of restoring normalcy in the oil market without a lasting peace agreement. The IEA emphasized that achieving lasting peace in the Gulf is essential for stabilizing the crude oil market.
The report indicated that global oil inventories rose by 21 million barrels in June, marking the first increase in four months. This rise was attributed to an increase in the amount of oil at sea, compensating for the decline in onshore inventories.
Following a drop of 73 million barrels in May, OECD countries saw a further decrease of 62 million barrels in total oil inventories in June, with approximately 44 million barrels released from government reserves. Non-OECD countries also experienced a decline of 37 million barrels, with China alone accounting for a drop of 41 million barrels.
The IEA noted that benchmark crude oil prices continued to decline in June, erasing all gains made during the war. Increased movement of oil tankers from the Gulf and concerns over additional market supply have put pressure on prices.
According to the report, the price of North Sea dated crude fell by $22 per barrel in one month to around $68 per barrel. However, following a ceasefire violation on July 7-8, prices surged again, trading at approximately $77 per barrel at the time of the report.
The IEA also mentioned that while crude oil supply has increased, refinery operations and the supply of petroleum products are still normalizing at a slow pace.
In June, exports of refined petroleum products and LPG from Gulf countries were less than half of pre-war levels, while crude oil exports reached about three-quarters of February levels.
The report indicated that loading from major exporting refineries in the Gulf has not fully resumed, suggesting that their operations are still affected. Additionally, increasing attacks by Ukraine on Russian refineries and export infrastructure have added pressure to the global petroleum product market, impacting both exports and domestic fuel supplies.
Bhupendra Singh Chundawat is a seasoned technology journalist with over 22 years of experience in the media industry. He specializes in covering the global technology landscape, with a deep focus on manufacturing trends and the geopolitical impact on tech companies. Currently serving as the Editor at Udaipur Kiran, his insights are shaped by decades of hands-on reporting and editorial leadership in the fast-evolving world of technology.