Oil prices may be falling, but for the wrong reason: a ‘demand destruction’ throttling global consumption, report finds
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Oil prices are falling due to 'demand destruction' as global economies turn away from oil, with demand projected to contract by 80,000 barrels per day in 2026. The decline is driven by high prices and supply chain disruptions amid the ongoing Iran conflict.
Oil prices are falling from their March peak, but not due to a stabilizing global economy. The International Energy Agency (IEA) reports that 'demand destruction' is throttling global consumption, with oil demand projected to contract by 80,000 barrels per day in 2026. The sharpest demand cuts are in the Middle East and Asia Pacific. High prices and supply chain disruptions, exacerbated by the Iran conflict and attacks on energy infrastructure, are driving this decline. Companies and governments are responding by reducing travel and fuel costs. The International Air Transport Association (IATA) warns that jet fuel costs will take months to return to pre-war levels, with some airlines increasing airfares by up to 40%.
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