Source: Fortune
Summary
Global oil demand is expected to decline by 1 million barrels per day in 2026, according to the International Energy Agency, due to higher oil prices and supply disruptions caused by the US-Iran war. The Strait of Hormuz, a major oil route, was affected by the conflict, leading to a decline in oil demand, especially in Asia. China’s decrease in oil consumption was the largest globally, with a 9% decline.
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The numbers tell one story.
The war between the US and Iran has caused a decline in global oil demand, with China’s decrease being the largest. The Strait of Hormuz, a critical oil route, was affected by the conflict. Despite the decline, the US saw an increase in gasoline consumption in the second quarter of 2026. China’s decision to cut down on purchasing oil from the global market has helped keep oil prices from spiking higher.
The crisis has accelerated China’s shift to electric vehicles, with a significant demand loss for gasoline and diesel.
The fragile ceasefire in the Strait of Hormuz has allowed some ships to exit, leading to lower oil prices. However, tensions between the US and Iran remain, and the oil market is not shocked by the conflict.
The situation is a prime example of how geopolitics can impact the oil market, and how countries can adapt to changing circumstances.
Author: Evan Null
