IEA Cuts Oil Demand Forecast; Trump Claims Hormuz Control Amid Iran Demands

The International Energy Agency (IEA) on Wednesday sharply reduced its 2026 global oil demand forecast, now predicting a 1.6 million barrels per day slump, an increase from its July forecast of one million barrels.

The IEA attributes this to shipping disruptions in the Strait of Hormuz and high prices. Global observed oil inventories fell below 7.9 billion barrels in July, marking the lowest level since April 2025. Supply remained 6.3 million barrels a day lower year-on-year in July. Brent crude prices reached nearly $90 per barrel on Tuesday night, up from around $70 before the war.

The IEA report emphasizes the increased urgency of reopening the Strait as inventory buffers rapidly deplete. President Donald Trump stated on Wednesday that the U.S. has total control over the Strait of Hormuz, describing the naval blockade as a wall of steel. Secretary of Energy Chris Wright claimed on Tuesday that the seven-day average for oil leaving the Strait of Hormuz is almost 9 million barrels per day.

Wright added that total oil exports from Gulf states average about 15 million barrels per day when pipelines are included. He suggested private businesses undercount ship numbers due to covert movements. However, market research service Commodity Context tracked 7 million barrels per day by sea for the past week, while Kpler estimated only 5 million barrels per day by sea.

Kpler data also shows vessel transits through Hormuz at a five-day average of around 13 on Tuesday, a near three-month low since May 12. This traffic represents about a 90% decrease from the pre-war daily average of 130 ships. Iran's top national security official Mohsen Rezaei said Tuesday that Hormuz will not open fully until Washington agrees to Tehran's demands.

Iranian Foreign Minister Abbas Araghchi reiterated this position on Tuesday. President Trump on Monday stated he now intends to demand compensation from Iran for all of the people that they have killed, following Iran's own demands for compensation in peace talks.