by SCN International Desk
PARIS/ISLAMABAD: Global oil demand is expected to decline sharply this year as ongoing conflict involving Iran disrupts energy supplies and weakens economic activity worldwide, according to a new report by the International Energy Agency.
The agency has revised its forecast, now predicting a drop in oil demand compared to earlier expectations of growth, citing prolonged supply disruptions and rising uncertainty in global markets.
Officials warn that higher prices and limited availability of fuel are already forcing a slowdown in consumption, a trend described as “demand destruction.”
The situation has been further aggravated by disruptions in the strategically vital Strait of Hormuz, where tensions have significantly reduced the flow of energy supplies.
Analysts say the second quarter could witness the steepest decline in oil demand since the COVID-19 pandemic, with major impacts reported across the Middle East and Asia-Pacific regions.
Global institutions have urged countries to avoid stockpiling energy resources, warning that such actions could intensify the crisis and further destabilize markets.
Meanwhile, the ongoing uncertainty has driven energy prices higher, placing additional pressure on economies already facing inflation and slowing growth.
Interestingly, Russia has emerged as one of the key beneficiaries of the crisis, with increased oil revenues driven by higher global prices and export volumes.
The report cautions that unless energy flows through critical routes are restored soon, the world could face deeper economic disruptions in the months ahead.