The International Energy Agency has signaled that global oil demand is recovering, citing the tentative resumption of supplies through the Strait of Hormuz as a key driver.
The assessment comes as energy prices ease, reflecting a shift in market sentiment away from the severe supply disruption fears that have dominated the sector in recent weeks.
This development stands in stark contrast to the IEA’s previous market report, which projected a historic contraction in global oil demand—the first such decline since 2020.
That earlier forecast was heavily influenced by the ongoing conflict in Iran and the associated risks to energy infrastructure and export routes.
The current update suggests that the immediate threat to flow has receded enough to allow demand fundamentals to reassert themselves.
The resumption of shipping through the Strait of Hormuz is critical for global energy markets, as the waterway handles a significant portion of the world’s crude oil and liquefied natural gas trade.