Azernews.Az

Global oil demand is projected to decline by 2.7 million barrels per day to 102.3 million barrels in 2026, before recovering with an expected increase of 2 million barrels per day in 2027, according to the International Energy Agency (IEA).

The forecast was outlined in the agency's November report.

The IEA expects the global oil market to move into a surplus in the fourth quarter of 2026, driven by a recovery in supply, increased exports from the Middle East and weaker consumption.

According to the report, the year-on-year decline in global oil demand is expected to moderate to 2.7 million barrels per day in the fourth quarter of 2026. By comparison, demand fell by an average of 4.4 million barrels per day in the second and third quarters.

The agency expects oil demand growth in 2027 to be driven primarily by higher consumption of liquefied petroleum gas (LPG), ethane and naphtha.

As supply chains return to normal, these products are expected to account for approximately 80% of the projected increase in global oil demand next year.

Meanwhile, high fuel prices, the growing electrification of vehicles and improvements in fuel efficiency are expected to limit growth in oil consumption in the transport sector.