The International Energy Agency (IEA) has predicted that demand for crude oil will likely see its biggest slump in the second quarter of this financial year. In its April Oil Market Report released today, the agency said, global oil demand is expected to contract by 80 thousand barrels per day. In Q2, demand is expected to drop by 1.5 million barrels per day which would be the biggest fall since COVID pandemic. The report attributed the decline largely to oil flow disruptions caused by the West Asia conflict and its impact on the global economy.
The report also highlighted that global oil supply plummeted by 10.1 million barrels per day to 97 million barrels per day in March, due to attacks on energy infrastructure in West Asia and ongoing restrictions on tanker movements through the Strait of Hormuz.
The report highlighted that announcement of a two-week ceasefire in the conflict provided some respite to global oil markets, however, it remains unclear whether the ceasefire will lead to lasting peace and a return to regular shipping flows through the Strait of Hormuz.