Global oil demand is expected to fall this year as a major disruption to supply routes in the Middle East triggers what analysts describe as one of the most severe energy shocks in history, according to reporting from Times UK. The International Energy Agency (IEA) has warned that the effective closure of the Strait of Hormuz has fundamentally altered global consumption patterns and forced a downward revision in oil demand forecasts.
The agency said the conflict has “thoroughly upended the global outlook for oil consumption,” projecting a reduction of around 80,000 barrels per day in global demand for the year. The revised outlook marks a significant reversal from earlier expectations of growth and reflects the escalating impact of supply constraints, rising prices, and regional instability on energy markets.
The International Energy Agency said the crisis has led to what it described as “the largest disruption in history” to oil flows through one of the world’s most critical shipping routes. The Strait of Hormuz, a key passage for global crude exports from the Middle East, has seen severe restrictions, sharply reducing available supply and pushing energy prices higher. As a result, global consumption has already begun to contract in certain regions, particularly in Asia-Pacific and the Middle East.
According to the IEA, the most significant declines in demand are being seen in fuel categories such as naphtha, liquefied petroleum gas, and jet fuel, as higher prices and limited availability force industries and consumers to cut back. The agency also reported a steep year-on-year contraction in global oil demand in recent months, with April experiencing one of the sharpest declines since the COVID-19 pandemic.
The report highlights that while some alternative export routes have been used to partially offset losses, they have not been sufficient to stabilise global supply levels. The disruption has been compounded by continued tensions in the region, which have affected tanker movements and reduced confidence in the stability of energy transport corridors.
Despite expectations that flows through the Strait of Hormuz could eventually resume, the IEA warned that uncertainty remains high and that its projections may be overly optimistic if the conflict continues. Other energy bodies, including OPEC, have also adjusted their forecasts in response to shifting market conditions, though longer-term demand expectations remain broadly unchanged.
The energy shock has had wide-ranging economic consequences, including sharp price increases for Brent crude, which saw its largest monthly gain on record earlier this year. While prices have since fluctuated amid diplomatic developments and market speculation, analysts warn that sustained disruption could continue to weigh heavily on global growth, trade, and inflation.
As governments and international organisations monitor the situation, energy officials have urged restraint in policy responses to avoid further destabilising supply chains. The IEA has stressed that restoring stable flows through the Strait of Hormuz remains the most critical factor in easing pressure on global energy markets and preventing a deeper and more prolonged economic impact.
