The International Energy Agency said Friday that "a recovery" in global oil demand had started as supplies tentatively start moving through the strategic Strait of Hormuz again and prices ease.
"A recovery in world oil demand is underway, with consumption set to rise from its May nadir," AFP quoted the IEA's monthly report as saying.
The agency had in June predicted a fall in demand of 1.1 million barrels a day (mbd) through 2026 because of the Middle East war, which strangled traffic through the strait. It now expects a one million barrel a day fall.
"Global oil supply rebounded by a sharp 4.1 mbd to 98.8 mbd in June, as a resumption of flows through the Strait of Hormuz underpinned a partial recovery in Gulf production. World output was nevertheless some 9.4 mb/d below pre-war levels," it said.
"Total Gulf oil exports, including volumes bypassing the Strait, surged by 6.5 mbd in June, to 16.1 mbd - a big jump but still well below the 24 mbd average before the war started."
According to the IEA, world supply improved to 102.6 mbd in June and would continue to get better if there was "a swift de-escalation of renewed hostilities".
"If transit volumes improve, oil supply will expand by 7.5 mbd next year," the agency added.
The agency said world oil reserves increased for the first time since the US-Israeli attacks on Iran on February 28 set off the war.
It added that stocks in the richest nations had fallen as their oil imports remained low despite the rise in volumes being transported by sea.
While oil prices fell dramatically in June, fresh fighting between US and Iranian forces this week "clouds the outlook", the IEA said.
"Renewed exchanges of fire in the Gulf this week highlight the risks of not reaching a lasting peace agreement, which is a must for the normalization in oil markets," it commented.
