Global oil demand is dropping, but US drivers keep buying more gas
Summary
Global oil demand is expected to fall in 2026 for the first time since 2020, mainly because of higher prices and supply problems caused by the conflict between the U.S. and Iran. While oil use dropped in many parts of the world, especially Asia, U.S. drivers actually used more gasoline during the same period.Key Facts
- The International Energy Agency forecasts a global drop of about 1 million barrels of oil per day in 2026.
- Supply was disrupted by the war between the U.S. and Iran, causing delays for oil shipments in the Strait of Hormuz.
- Global oil demand was 5.3 million barrels per day lower in May 2026 compared to the previous year.
- China reduced its oil consumption by 1.5 million barrels per day, a 9% decrease.
- China cut back partly by halting its purchase for its strategic oil reserve and increasing electric vehicle use.
- U.S. gasoline use increased in the second quarter of 2026, even though prices were about 50% higher than before the conflict.
- Tensions between the U.S. and Iran caused some fluctuations in oil prices, but prices did not spike as they did earlier in the year.
- A fragile ceasefire allowed some oil shipments through the Strait of Hormuz, easing market pressure.
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