Oil prices may be falling, but for the wrong reason: a ‘demand destruction’ throttling global consumption, report finds

Oil prices are beginning to fall from their March peak, but policy experts warn sinking energy costs don’t necessarily mean the global economy has stabilized as the Iran war continues on.

A report published by the International Energy Agency (IEA) on Tuesday noted the threat of “demand destruction” as consumers and global economies turn away from oil as prices remain elevated. According to the report, oil demand is projected to contract by 80,000 barrels per day in 2026, with the sharpest demand cuts in oil coming from the Middle East and Asia Pacific.

The IEA projected last month that global oil demand would grow by 730,000 barrels per day in 2026.

While Brent crude has come down from its record $144 per barrel earlier this month, oil prices remain elevated as the U.S. blockades the Strait of Hormuz, through which 20% of the world’s oil usually passes, and as key energy infrastructure in the Middle East continue to be a target for attacks. The IEA said demand for oil will continue to contract as supply chains remain disrupted and prices remain high.

Early policy changes suggest companies and governments are already responding to high oil prices by pulling........

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