The International Energy Agency (IEA) predicts a drop in global oil consumption this year. This would be the first decline in this sector since the Covid-19 pandemic.

According to the agency, for the rest of 2026 global oil consumption will be reduced due to what is happening in the Middle East, with peace negotiations between the United States and Iran that are interrupted by armed events.

“The beginning of the ceasefire agreement between the United States and Iran seemed to give a momentary respite to the hydrocarbon industry, considering the constant rise in the price of a barrel since the beginning of the war in the Persian Gulf. However, the new escalation of hostilities between both nations once again distorted expectations regarding the future of the market.”

Projections for the oil sector in 2027

In addition to pointing out a drop in global crude oil consumption this year of 1,000,000 barrels per day, by 2027 it foresees a recovery and increase to 2,000,000 bpd.

Given the difficulty of achieving a lasting peace agreement and the armed clashes in the Persian Gulf last week, the normalization of oil markets is in doubt.

In June, after the ceasefire between the United States and Iran, the barrel of Brent fell “from $98 to a minimum of $70. The return of the attacks interrupted this decline in prices, which reached $78 in July.”

The agency has indicated that in June global oil supply increased by 4.1 million barrels per day, to 98.8 million in response to “the partial reopening of transit through the Strait of Hormuz. Instead, production remained at about 9.4 million barrels per day below pre-war levels.” Exports from the region also increased from 6.5 million barrels per day to 16.1 million.

Although the agency estimates that there may be a surplus in the oil market towards the end of the current year, “it assured that the forecast is based” on the assumption that oil tanker flows through the strait will gradually recover, allowing producers to restart fields and refineries in the Middle East and elsewhere to resume shipments of products.

M.Pino

Source: rionegro

(Reference image source: benjamin lehman on Unsplash)

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The ministers of Economy and Finance of the Eurozone, the Eurogroup, confirmed this Wednesday the loss of momentum of the eurozone economy, although they stressed that it continues to “resist” and that “there are no reasons to foresee a deep and prolonged recession.”

This was stated by the president of the Eurogroup, Paschal Donohoe, after addressing the macroeconomic situation in the countries of the Eurozone at the meeting that the ministers held this Wednesday in Brussels to analyze the impact of recent geopolitical events such as the conflict in the Near East.

The European Commissioner for Economy, Paolo Gentiloni, has also agreed with this diagnosis, who has recognized that the short-term prospects remain “challenging”, since GDP contracted by 0.1% in the Eurozone in the third quarter, while short-term indicators suggest that economic momentum will remain “weak” at the beginning of the current quarter.

So far, Gentiloni added, the impact of tensions in the Middle East on energy markets has been contained, but he warned that there is a “risk” of an increase in oil prices if the conflict escalates.

“These new geopolitical tensions add even more risks and uncertainty,” acknowledged the Italian commissioner, who announced that next Wednesday Brussels will present its autumn economic forecasts and that they will take the latest events into account.

Likewise, he added that in relation to the “very pessimistic scenarios” that the EU had in mind a year ago regarding recession, inflation and energy and that this is still a “challenging” scenario, he highlighted that the Eurozone economy has been able to “avoid a deep recession and an energy crisis during the winter.”

Source: dpa

(Referential image source: Extenda, Europa Press / dpa)

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