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The International Energy Agency is lowering its world oil demand forecast for the year, noting that the war in Iran is leading to escalating fuel prices, limited oil supplies and a deteriorating economic outlook.<\/p>\n
The agency’s report on Wednesday said that global oil demand is predicted to drop 2.5 million barrels a day year-over-year in the fourth quarter and fall 2.6 million barrels a day on average this year. Diesel is expected to account for 25% of the drop.<\/p>\n
The IEA foresees a partial recovery of 2 million barrels a day next year, but that still puts global oil use 0.6% below 2025 levels. <\/p>\n
Global production climbed 2.5 million barrels a day month-over-month to 102.3 million barrels a day in September, driven by Gulf producers. OPEC+ gains of 2.1 million barrels a day were led by Saudi Arabia, while the United Arab Emirates drove non-OPEC+ increases.<\/p>\n
Oil supply is expected to drop by 5.8 million barrels a day to 100.7 million barrels a day this year before climbing by 7.7 million barrels a day next year. The agency said that renewed Gulf attacks \u201cleave the recovery fragile.\u201d<\/p>\n
While gas prices<\/a> in the U.S. have moved lower in recent weeks, they remain higher than a month ago. Gas prices averaged $4.33 per gallon on Wednesday, according to AAA, up slightly from a month ago.<\/p>\n Brent crude, the international standard, gained 0.6% to $106.37 a barrel Wednesday morning. Benchmark U.S. crude rose 1.2% to $95.30 a barrel. <\/p>\n Brent has been pinballing between $96 and nearly $110 over the last month on uncertainty about when the war with Iran<\/a> will allow the global energy industry to return to normal.<\/p>\n On Friday, President Donald Trump announced that he had struck a deal<\/a> with Russian President Vladimir Putin to immediately supply the U.S. more than 300,000 tons of diesel<\/a>. That would be followed by an additional 500,000 tons in November, then 4 million more tons at some point after that. But energy policy experts say that the new pact is unlikely to make a dent in painfully high prices at the pump or elsewhere.<\/p>\n The price of diesel has shattered records<\/a> in recent weeks, ratcheting up inflation for a broad swath of consumer goods.<\/p>\n