President Donald Trump appeared to say on Wednesday that global oil reserves would have ran out in four weeks without a deal with Iran.
Speaking to press while at the G7 summit in France, Trump said "there are reserves all over the world, and we would really run out, and there'll be a time when you wouldn't be able to get it." He added that such a scenario would have been "bedlam."
Several analysts were warning of declining reserves, saying oil prices could skyrocket if they reached certain critical levels and there was no end to the blocking of the Strait of Hormuz in sight.
Energy markets have been rocked by the conflict despite the agreement. The International Energy Agency (IEA) has sharply downgraded its outlook for global oil demand this year after the shock.
In its latest Oil Market Report, released Wednesday, the Paris-based agency said global oil demand growth has weakened substantially from the optimistic forecasts it published at the start of the year.
The revised outlook marks another step in a series of downward revisions that have transformed expectations for the oil market this year. The body now expects oil demand to contract rather than expand, a dramatic shift from its January forecast, when it projected global demand growth of roughly 930,000 barrels per day (bpd) in 2026.
By February, the agency had already reduced that estimate to 850,000 bpd, and by March it cut the forecast again to 640,000 bpd as higher prices and the blocking of the Strait of Hormuz weighed on consumption.
The most significant downgrade took place in the spring. In its April report, the IEA projected that global oil demand would decline by 80,000 bpd on average in 2026, compared with an earlier expectation of growth. A month later, the agency deepened that assessment, forecasting a year-over-year contraction of about 420,000 bpd and estimating that demand would be roughly 1.3 million bpd lower than its pre-conflict projections.
The IEA has repeatedly warned that higher crude prices and transportation disruptions are suppressing fuel consumption, particularly in transportation and industrial sectors. Despite weaker demand, the agency believes supply growth remains relatively robust, creating the potential for a significant surplus once geopolitical disruptions ease.
The agency's latest long-term assessment projects global oil supply could increase far faster than demand in 2027, setting the stage for one of the largest surpluses in recent years. The agency forecasts supply growth of about 8 million bpd next year, compared with demand growth of roughly 2 million bpd.
