Oil price spike turmoil far from over, IEA says as inventories are depleted at “record pace"

The IEA said oil prices could rise further over the summer as inventories deplete rapidly, adding pressure to an already tight market. It also warned that the war is destroying demand, forecasting a 420 thousand barrels per day contraction by the end of 2026. The combination of tighter near-term supply and weaker medium-term demand is negative for the oil market and likely to influence energy sector pricing.

Analysis

The IEA said oil prices could rise further over the summer as inventories deplete rapidly, adding pressure to an already tight market. It also warned that the war is destroying demand, forecasting a 420 thousand barrels per day contraction by the end of 2026. The combination of tighter near-term supply and weaker medium-term demand is negative for the oil market and likely to influence energy sector pricing.