IEA cuts oil demand amid Hormuz closure

The International Energy Agency (IEA) sharply cut its 2026 global oil demand forecast by 1.6 million barrels per day, citing the prolonged closure of the Strait of Hormuz and elevated fuel prices. The closure, a result of the US-Israeli-Iran conflict that began in late February, has disrupted about one-fifth of global oil supplies. Despite a purported ceasefire and diplomatic efforts, only a limited number of vessels have been allowed through, keeping oil prices volatile. Global supply rose in July but remained well below year-ago levels. The IEA expects supply to decline further this year before recovering next year. Oil prices rose again, with Brent and WTI up about 14% in the past week. Markets were mixed ahead of US inflation data, with the United States — Federal Reserve considering rate hikes due to persistent inflation. US-Iran talks have shown little progress, with both sides hardening positions. A US helicopter fired missiles at a cargo ship attempting to break the blockade. Iran and Oman reportedly held talks on reopening the strait, but Iran insists it will remain shut until its conditions are met. Equity markets were mixed, with Seoul's KOSPI climbing over 3% on tech gains, while Wall Street ended lower on fading peace optimism.