Global oil demand is expected to be almost one million barrels per day less than was forecast before the Iran war, as shortages and soaring costs prompt drastic cutbacks by consumers and businesses, a report by the International Energy Agency (IEA) said on Wednesday.
With the closure of the Strait of Hormuz choking off supplies and keeping prices high, less oil is being used to make products such as jet fuel, LPG cooking gas and petrochemicals, the Paris-based IEA said in its monthly oil report, forecasting the biggest quarterly demand drop since the COVID pandemic.
The Iran war “upends our global outlook”, the government-backed agency said, adding that it now expects oil demand to shrink by 80,000 barrels per day in 2026 from last year.
Before the conflict began, the IEA said in February it expected oil demand to rise by 850,000 barrels per day this year, meaning the difference between the pre-war and current estimates is 930,000 barrels a day, or 340 million barrels a year.
That could have a significant impact on the outlook for planet-heating carbon emissions this year.
At an intensity of 434 kg of carbon dioxide per barrel of oil – the estimate used by the US Environmental Protection Agency – the annual reduction in carbon dioxide emissions from oil for 2026, compared with the pre-war forecast, is similar to the amount emitted by the Philippines each year.
Harry Benham, senior advisor at Carbon Tracker, told Climate Home News that he expects at least half of the reduction in oil demand to be permanent because of efficiency gains, behavioural change and faster electrification.
The oil shock is leading to oil being replaced, especially in transport, with electricity and other fuels, just as past oil shocks drove lasting reductions in consumption, he said. “The shock doesn’t delay the transition – it reinforces it,” he added.
Demand takes a hit
While demand for oil has fallen significantly, supplies have fallen even further. Supply in March was 10 million barrels a day less than February, the IEA said, calling it the “largest disruption in history”.
This forecast relies on the assumption that regular deliveries of oil and gas from the Middle East will resume by the middle of the year, the IEA said, although the prospects for this “remain unclear at this stage”.
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Last month, US Energy Secretary Chris Wright told the CERAWeek oil industry conference that prices were not high enough to lead to permanent reductions in demand for oil, known as demand destruction.
But the IEA said on Wednesday that “demand destruction will spread as scarcity and higher prices persist”.
Industries contributing to weaker demand for oil include Asian petrochemical producers, who are cutting production as oil supplies dry up, the report said, while consumers are cutting back on liquefied petroleum gas (LPG), which is mainly used as a cooking gas in developing countries, the IEA said.
Flight cancellations caused by the war have dampened demand for oil-based jet fuel, the IEA said. As well as cancellations caused by risk from the conflict itself, airports have warned that fuel shortages could lead to disruption.
Across the world, governments, businesses and consumers have sought to reduce their oil use after the war. The government of Pakistan has cut the speed limit on its roads, so that people drive at a more fuel-efficient speed, and Laos has encouraged people to work from home to preserve scarce petrol and diesel.
Nepal’s EV revolution pays off as oil crisis causes pain at the pumps
Consumers in Bangladesh are seeking electric vehicles (EVs) to avoid fuel queues and, in Nigeria, more people are seeking to replace petrol and diesel generators with solar panels, Climate Home News has reported.
In the longer term, the European Union is considering cutting taxes on electricity to help it replace fossil fuels and France is promoting EVs and heat pumps.
IEA urged to help “future-proof” economies
Meanwhile, the IEA came under fire last week from energy security experts, including former military chiefs, who signed an open letter in which they accused the agency of offering “only a temporary response to turbulent markets”, calling for stronger structural action “to future-proof our economies”.
They said that besides releasing emergency oil stocks and offering advice on how to reduce oil demand in the short term, the IEA should show countries how to reduce their exposure to volatile oil and gas markets.
The IEA has also been under pressure from the Trump administration to talk less about the transition away from fossil fuels.
This article was amended on 15 April 2026 to correct the drop in 2026 forecast oil demand from “nearly a billion” to “nearly a million”
The post IEA slashes pre-war oil demand forecast by nearly a million barrels per day appeared first on Climate Home News.
IEA slashes pre-war oil demand forecast by nearly a million barrels per day
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Climate Change
DeBriefed 19 June 2026: Bonn talks end in ‘gridlock’ | Energy’s ‘new era’ | Oceans in climate negotiations
Welcome to Carbon Brief’s DeBriefed.
An essential guide to the week’s key developments relating to climate change.
This week
Bonn talks close
‘SIDE-STEPPING AND STALLING’: UN climate talks in Bonn have ended in “gridlock”, according to Climate Home News. The outlet reported on the failure to balance developing countries’ need for climate-adaptation finance with “richer nations’ desire to move forward” on emissions cuts. It added that both topics were subject to “rule 16”, meaning no agreement could be reached and work will be pushed to the COP31 summit in Turkey. Inside Climate News quoted UN climate executive secretary Simon Stiell, who said the talks had seen “side-stepping and stalling”.
JUST TRANSITION: One “glimmer of hope” came from negotiations on achieving a “just transition”, reported Euronews. The news outlet said negotiators “made headway on operationalising the Belém-Antalya mechanism”, intended to support people in the shift to a low-carbon economy. However, Politico concluded that much of the focus in Bonn had “shift[ed] to efforts outside diplomatic talks – raising questions about the future of global climate negotiations”.
‘ATTACKING SCIENCE’: Agence France-Presse reported on the EU, Switzerland and “dozens of developing nations” warning of “attacks on science” by a “small group of fossil-fuels interests” in Bonn. Table Briefings explained that “the 1.5C target is increasingly being challenged” and the role of the UN climate-science panel – the Intergovernmental Panel on Climate Change (IPCC) – in an upcoming assessment of global climate progress “remains controversial”. See Carbon Brief’s full write-up of the talks for more detail.
US-Iran deal
PRICE DROP: The US and Iran announced that they have reached an interim agreement to halt the war and reopen the strait of Hormuz, reported Bloomberg. Oil prices have fallen, as the “long-awaited deal” began the process of “eas[ing]” the global energy crisis triggered by the conflict, according to the New York Times. The Associated Press noted that high fuel prices will “likely outlast the Iran war”.
‘OIL GLUT’: The Financial Times reported that the International Energy Agency (IEA) has forecast a “glut of oil” emerging next year, if the peace deal holds. The IEA said this would allow countries to build new strategic reserves, as they “review their energy strategies and policies in response to the crisis”, according to Reuters.
‘NEW ERA’: Agence France-Presse reported that oil and gas companies have “few illusions about a return to normal for the Gulf energy industry after more than three months of blockage”. One analyst told the newswire that the war “showed the oil and gas industry that Hormuz risk is no longer just a geopolitical headline”.
Around the world
- OCEAN MONITOR: The Trump administration is “abandoning its plan” to dismantle a $368m ocean monitoring system key for tracking climate change after a “bipartisan backlash on Capitol Hill”, reported the New York Times.
- CORAL HAVEN: The New York Times covered preliminary research, presented at the Our Ocean Conference in Kenya, suggesting there could be three times as many “coral refugia” – where corals are relatively safe from climate change – than previously thought.
- BAD CREDIT: Down to Earth reported that the first carbon credits issued under the Paris Agreement’s new Article 6.4 mechanism are “facing scrutiny over alleged links to institutions controlled by Myanmar’s military junta”.
- OIL BACKTRACK: Reuters reported that oil-and-gas company Equinor has dropped a renewable-energy target and scaled back clean investments, while another Reuters story noted that Shell is selling off its offshore wind assets.
1.1 billion
The number of children facing “at least three overlapping climate hazards”, according to a new Unicef report covered by Agence France-Presse.
Latest climate research
- Including the “permafrost carbon-climate feedback” in climate models increases the chance of exceeding “tipping elements” – such as the Greenland ice sheets, Atlantic Meridional Overturning Circulation or Amazon rainforest – by up to 50% | Environmental Research Letters
- The intensity of influenza outbreaks could decline in temperate regions, but increase in tropical areas over the next century, as the climate warms | PNAS Nexus
- European snow cover has declined by 20% for December and January since the start of the industrial era, revealing an “unprecedented ongoing shrinkage of European winters” | Communications Earth & Environment
(For more, see Carbon Brief’s in-depth daily summaries of the top climate news stories on Monday, Tuesday, Wednesday, Thursday and Friday.)
Captured
The more than 2m battery electric vehicles (BEVs), 1m “plug-in” hybrids (PHEVs) and 100,000 electric vans on UK roads are already saving drivers a total of around £3bn a year, according to new Carbon Brief analysis. This amounts to savings of more than £1,100 a year in fuel costs for each BEV driver in the UK. The analysis comes amid reports in UK media this week that the government is considering “watering down” its EV sales targets.
Spotlight
Oceans rising at UN climate talks
The state of the world’s oceans is inextricably linked to the changing climate – and many delegates at UN climate talks want to see more focus on this issue, reports Carbon Brief.
Oceans are often described as the world’s “greatest ally” against climate change – absorbing 30% of carbon dioxide (CO2) emissions and most of the heat generated by those emissions.
They are also the site of important climate solutions, such as huge offshore windfarms and the shipping industry’s transition to cleaner fuels.
At the same time, the oceans themselves present a growing danger to coastal communities and sea life due to sea level rise, marine heatwaves and ocean acidification.
These diverse issues have led to growing calls within the UN climate process for more focus on oceans. During climate negotiations this week in Bonn – known as SB64 – nations and civil society had a chance to air these views during an “ocean and climate change dialogue”.
‘Elevate action’
Oceans first entered UN climate outcomes in 2019, when the final COP25 negotiated text requested a new “dialogue” on “the ocean and climate change to consider how to strengthen mitigation and adaptation action”.
The following years saw this dialogue established as an annual event. However, the political weight of these discussions has been limited.
COP31 is being co-led by Turkey and Australia, but with Pacific islands playing a supporting role. These small islands sometimes self-identify as “large ocean states”, stressing the ocean’s centrality in their societies.
In Bonn, figures from across the presidency threw their weight behind this issue. Chris Bowen, an Australian minister and incoming COP31 “president of negotiations”, told attendees:
“Australia, Turkey and the Pacific see an important opportunity to elevate ocean-based climate action.”
Strategies and finance
The two-day dialogue in Bonn involved a series of panels, statements and breakout groups.
One of the main topics was how oceans are integrated into national climate plans under the Paris Agreement, known as “nationally determined contributions” (NDCs).
Three-quarters of the latest round of NDCs mention oceans, with conservation of “blue carbon” ecosystems the most frequently described action. (Landscapes such as mangroves can both absorb CO2 and protect coastal areas.)
Delegates also discussed alignment with the UN biodiversity process, as well as ocean finance, which currently makes up less than 1% of all climate finance.
(As discussions were taking place in Bonn, country officials also gathered in Mombasa, Kenya for the 11th Our Ocean Conference. Carbon Brief’s associate editor Giuliana Viglione attended the conference and will publish a full summary shortly.)
Developing countries were clear that many of the ocean-related actions in their NDCs would depend on receiving more financial support.
‘Political momentum’
With the backing of the COP31 presidency, delegates were hopeful about where this year’s dialogue could lead.
Charles Hamilton, an advisor for the Bahamas who spoke for the Alliance of Small Island States (AOSIS) in the dialogue, told Carbon Brief that island representatives “are not traveling thousands of miles to just talk and pat ourselves on the back”. He added:
“A dialogue that just remains a dialogue is just more talk – no action.”
Given that, he said “discussions in the dialogue must move into COP decisions and the decisions must be actioned”, noting the importance of finance.
Marina Corrêa, oceans lead at WWF-Brazil, pointed to an upcoming UN climate change Standing Committee on Finance forum as a space to ramp up pressure on ocean finance.
More broadly, she wanted to see the presidencies translate their support into a “leader-level ocean initiative” that could “mainstream” oceans across negotiations.
“We have a really interesting opportunity, in terms of political momentum,” Corrêa told Carbon Brief.
Watch, read, listen
‘HOTTER THAN HELL’: An episode of the BBC’s Rare Earth podcast titled “hotter than hell” considered the issue of extreme heat, with input from experts and “people facing up to the hottest temperatures on the planet”.
NOT BROKEN?: John Drake, a professor of ecology at the University of Georgia, wrote an essay for Aeon – also re-published as a Guardian “long read” – questioning the framing of ecosystems and climate systems “breaking down”.
ON COURSE: On his Volts podcast, US climate journalist David Roberts interviewed UK climate minister Katie White, quizzing her about whether the UK will “stay the course with its climate plans”.
Coming up
- 20-28 June: London climate action week
- 21 June: Colombia presidential runoff
- 24 June: UK Climate Change Committee progress in reducing emissions 2026 report to parliament
Pick of the jobs
- Mongabay, managing editor – Africa | Salary: Unknown. Location: Global
- Contexte, environment reporter – Brussels | Salary: €45,000-€60,000. Location: Brussels
- Climate 200, communications director | Salary: Unknown. Location: Australia
- Energy Tracker Asia, energy transition correspondent | Salary: $3,000-$4,000 per month. Location: South-east Asia (remote)
DeBriefed is edited by Daisy Dunne. Please send any tips or feedback to debriefed@carbonbrief.org.
This is an online version of Carbon Brief’s weekly DeBriefed email newsletter. Subscribe for free here.
The post DeBriefed 19 June 2026: Bonn talks end in ‘gridlock’ | Energy’s ‘new era’ | Oceans in climate negotiations appeared first on Carbon Brief.
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