Oil prices fell on Thursday as investors weighed a new demand forecast from the International Energy Agency, which predicted a slowdown, and unclear progress in talks between the US and Iran.
Futures on international pricing benchmark Brent crude (BZ=F) and US benchmark West Texas Intermediate (WTI) crude (CL=F) shed roughly 1.8% to trade below $68.20 and $63.50 a barrel, respectively.
In a new publication on Thursday, the International Energy Agency (IEA) said world oil demand would rise by 850,000 barrels per day (bpd) this year, 80,000 bpd lower than the agency’s January forecast. The figure is also much lower than that published by the Organization of Petroleum Exporting Countries on Wednesday, which said demand would rise by 1.38 million bpd this year.
The IEA also maintained its call that the market will spend 2026 in a deep oversupply glut, which the agency pegged at 3.73 million bpd of excess oil.
While market watchers had broadly coalesced around the likelihood of a supply glut through 2026, with prices expected to drop, oil prices have instead gained roughly 10% since the start of the year, following a series of geopolitical events, including the US takeover of Venezuela’s oil industry, widespread protests in Iran, and damage to key export terminals on the Caspian Sea.
In public comments on Thursday, the CEO of commodities trading house Vitol, Russell Hardy, said the global oil market is tightening instead of loosening, especially as the US ratchets up pressure on Russia and Iran, pushing buyers to find barrels in other markets.
Vitol is the world’s largest independent trader of oil.
The key swing factor for oil prices right now remains ongoing negotiations between the US and Iran over the Iranian regime’s uranium enrichment technology. President Trump on Wednesday deployed more military craft to the region, and analysts say any military action could result in retaliation from Iran, which controls the Strait of Hormuz, a critically important global chokepoint for oil flows.