Key takeaways IEA forecasts global oil demand falling 2.6 million barrels daily Brent remains above $105 despite weakening global consumption Supply declines and depleted inventories continue
Brent crude remained above $105 per barrel on October 14 even as the International Energy Agency forecast a sharp contraction in global oil consumption, highlighting an unusual imbalance between weakening demand and increasingly constrained supply.
The benchmark traded around $106.60 on Wednesday, up approximately 0.9%, as renewed attacks on Middle Eastern energy infrastructure kept traders concerned about potential disruptions.
<iframe src=”https://widgets.coincodex.com/w/37670f10-21d7-40bd-b00b-bfa32eacf03c?site=coinpaper&mode=light” width=”100%” height=”420” frameborder=”0” referrerpolicy=”no-referrer-when-downgrade” style=”border:0;background:transparent;border-radius:0px;”></iframe>According to the IEA's October Oil Market Report, global oil demand is expected to decline by 2.6 million barrels per day in 2026, falling to approximately 102.4 million barrels daily. However, global supply is projected to contract by an even larger 5.8 million barrels per day.
That difference helps explain why Brent remains elevated despite a substantial deterioration in worldwide oil consumption.
Why Is Brent Above $105 Despite Falling Oil Demand?Normally, declining oil consumption would place downward pressure on crude prices, particularly when weaker economic activity reduces transportation and industrial fuel demand.
However, the IEA expects global oil production to average approximately 100.7 million barrels daily in 2026, following disruptions to Middle Eastern energy infrastructure and international shipping routes.
Meanwhile, global oil demand is forecast to average 102.4 million barrels daily, leaving supply insufficient to meet consumption without drawing on inventories.
The difference is especially important because worldwide oil inventories have already fallen sharply. The IEA estimates that observed stocks declined by 509 million barrels between the end of February and September, while onshore inventories reached their lowest levels since at least 2016.
The situation follows a prolonged period of oil supply disruptions that have kept crude markets tight even as higher energy costs discourage consumption.
Oil Supply Falls Faster as Middle East Risks PersistDespite the annual decline expected for 2026, global oil production recovered substantially in September, increasing by 2.5 million barrels daily to 102.3 million barrels.
Saudi Arabia and other Gulf producers led the recovery, while crude exports from the region climbed to 13.9 million barrels daily, recovering more than three-quarters of prewar levels.
However, renewed attacks on Saudi energy infrastructure and commercial shipping threaten further improvements. Higher transportation and insurance expenses have also widened the difference between benchmark futures and physical crude prices.
The IEA reported that North Sea Dated crude recently reached approximately $134 per barrel, compared with Brent futures near $107.
This divergence reinforces earlier concerns about physical oil costs, particularly for Asian refiners paying elevated delivery premiums.
Can Brent Oil Prices Fall Below $100 in 2027?The IEA expects conditions to improve next year, forecasting a 7.7-million-barrel daily increase in global supply alongside a recovery of approximately 2 million barrels daily in demand.
Such a rebound could eventually restore a market surplus, potentially easing upward pressure on Brent prices. However, the timing depends heavily on whether disrupted production, shipping and refining capacity recover.
Governments have already attempted to stabilize markets through emergency oil reserves, but continued inventory depletion leaves relatively little protection against further supply shocks.
The IEA's latest projections suggest that weaker demand alone may not be sufficient to bring oil prices sustainably below $100 while available supply and inventories remain constrained.
