IEA cuts 2026 oil demand forecast and warns diesel will stay tight into 2027
Diesel supply is the pinch point as the Iran war keeps prices high.
Oil · Wednesday, October 14, 2026 · 12:30 PM ET
The International Energy Agency cut its forecast for 2026 oil demand on Wednesday and warned that tight diesel supply will last well into next year. Its October Oil Market Report blames the Iran war, high prices and a weaker economic outlook.
Demand forecast cut
The agency now expects world oil demand to fall by 2.6 million barrels a day in 2026, steeper than the 2.5 million barrel decline it forecast last month (Investing.com, Newsquawk). Diesel alone accounts for a quarter of the drop, Investing.com reports. A partial rebound of 2 million barrels a day in 2027 would still leave demand below 2025 levels.
Diesel is the pinch point
CNBC says the IEA expects the replenishment of lost inventories to start no earlier than the second half of 2027. Global diesel exports fell by 700,000 barrels a day from a year earlier in September, as a 1.3 million barrel a day loss from Russia and the Middle East was only partly offset (CNBC, Investing.com). Wholesale diesel hit record highs near $220 a barrel in Europe and the United States in September, both outlets report.
Supply and risks
World supply rose 2.5 million barrels a day to 102.3 million in September, led by Gulf producers (Investing.com). The IEA warned that renewed Gulf attacks leave the recovery fragile, and said a proposed Russian diesel deal would have little macroeconomic impact (CNBC). Brent futures were around $107, per Investing.com. See our earlier stories on the Houthi attack on Saudi Arabia and the September CPI, where gasoline drove the gain.