Global Oil Demand Set for First Annual Decline Since 2020: IEA's Key Drivers

The International Energy Agency (IEA) announced that global oil demand will decline annually for the first time since 2020, while Brent crude prices surge amid geopolitical tensions between Israel and Iran. The agency highlighted disruptions in Middle Eastern production, particularly due to the closure of the Hormuz Strait, which could reduce daily demand by 1 million barrels compared to last year.

Geopolitical Tensions and Oil Supply Disruptions

■The conflict in the Middle East has severely impacted exports via the Basra Gulf.

■Reduced tanker traffic through the Hormuz Strait has intensified regional imbalances.

■Recent ceasefire efforts by the U.S. and Iran have created short-term volatility in oil markets.

■Escalating conflicts pose risks to long-term demand forecasts.

Russia's Weakening Output: Ukrainian Strikes Take Their Toll

■Ukrainian drone attacks on Russia's energy infrastructure have strained production capacity.

■The IEA now expects Russia's daily output to reach 8.9 million barrels in 2024, down from 9.2 million barrels in 2025.

■Strikes on refineries and transportation infrastructure have led to supply bottlenecks.

■Projections suggest further declines in Russia's output amid reduced war funding.

Hakan Çelik Note: This decline in oil demand reflects both global economic slowdown and structural shifts in energy geopolitics. Conflicts in the Middle East remain a critical risk for energy security. For Turkey's economy, continued import dependency makes it vulnerable to external oil price shocks, which could strain public finances and inflation. In this environment, fiscal policy flexibility and energy diversification strategies become increasingly vital.