Bipartisan US senators have asked President Donald Trump to release emergency heating oil from the nation's strategic petroleum reserve as prices surge amid disruptions from the Iran conflict, according to the RSS feed excerpt. The request comes as global energy markets grapple with what the International Energy Agency calls the largest oil supply disruption in history.
In its monthly oil market report released Tuesday, the IEA said the Iran war will force both global oil supply and demand to fall from last year, thoroughly upending the global outlook for consumption. Brent crude futures were trading at $98.60 a barrel at 0847 GMT, virtually unchanged from $98.58 shortly before the report's release.
The agency cut its 2026 demand-growth forecast to an 80,000-barrel-a-day decline, down sharply from the 640,000-barrel daily rise projected in its March report. In the second quarter of 2026 alone, demand is expected to contract by 1.5 million barrels per day — the deepest quarterly drop since the COVID-19 pandemic. The IEA warned that demand destruction will spread as scarcity and persistently higher prices endure.
Supply-side disruptions have been even more acute. Attacks on regional energy infrastructure and the effective closure of the Strait of Hormuz caused a loss of 10.1 million barrels per day of supply in March. Flow through the strait — a critical global energy artery — fell to 3.8 million barrels per day in early April, down from more than 20 million barrels per day in February prior to initial US and Israeli strikes on Iran.
Global oil output is now expected to fall by an average of 1.5 million barrels per day this year compared with last, marking a swing of approximately 2.6 million barrels per day from the March forecast of a 1.1-million-barrel daily increase. On the demand side, the IEA flagged that the Middle East and Asia-Pacific are bearing the heaviest cuts in oil consumption, particularly affecting naphtha, LPG, and jet fuel. In an alternative scenario spanning the second through fourth quarters, demand could fall by as much as 5 million barrels per day year on year on average.
Under that severe scenario, the IEA estimated stock draws could reach nearly 2 billion barrels of oil. The agency's base-case forecast assumes a resumption of regular Middle East deliveries by mid-year. "Resuming flows through the Strait of Hormuz remains the single most important variable in easing the pressure on energy supplies, prices and the global economy," the IEA said.
Despite the disruptions, the IEA maintained that supply is forecast to outpace demand by 410,000 barrels per day in 2026 — a marked reduction from the 2.46-million-barrel daily surplus projected in the previous month's report.
"With the geopolitical situation still in flux and the prospects for a lasting negotiated settlement to the conflict still unclear, our two cases span the range of probable outcomes," the agency noted.
