The International Energy Agency (IEA) said global oil demand is on track for its first annual decline since 2020.

In its latest assessment, the IEA pointed to weakening demand growth and demand destruction that has spread across regions, particularly where higher prices, scarcity, and disruptions have reduced fuel use. It highlighted that consumption trends are being hit by factors such as reduced mobility and weaker activity in parts of the transport sector, while petrochemical and other industrial demand has also been affected in some markets.

The IEA’s forecast framed the shift as a significant change from recent years, when demand had been growing, and it linked the slowdown to the combined effects of current disruptions and uncertainty around how energy trade and supply conditions evolve.