Global demand for refined petroleum products is projected to decline by 2.4 million barrels per day before the end of 2026 as the US-Iran conflict disrupts energy supplies, raises fuel prices and affects international shipping and aviation.
The forecast, provided by energy intelligence firm Kpler, indicates that the impact will be concentrated in the second and third quarters of the year, when supply interruptions and restrictions on transportation activities are expected to weigh heavily on consumption.
Diesel and gasoil are projected to record the largest decline, with global demand expected to fall by 500,000 barrels per day. Liquefied petroleum gas (LPG) consumption is forecast to drop by 460,000 barrels per day, while naphtha demand is expected to decrease by 350,000 barrels per day.
The report also projects a 330,000-barrel-per-day decline in gasoline consumption, alongside reductions of 200,000 barrels per day in jet fuel and kerosene demand and 120,000 barrels per day in fuel oil consumption.
Kpler attributed the decline to higher retail fuel prices, reduced availability of feedstock for petrochemical industries, government conservation measures, aviation restrictions and disruptions to shipping activities around key Gulf trading routes.
Asia is expected to account for a significant share of the LPG demand reduction, with consumption projected to fall by 370,000 barrels per day in 2026.
China and India are expected to record declines of 230,000 barrels per day and 100,000 barrels per day, respectively, as reduced supplies from the Middle East affect their consumption.
China’s petrochemical industry has been particularly exposed to the disruption, with approximately half of its seaborne LPG imports passing through routes linked to the Strait of Hormuz.
The report further indicated that Asian naphtha imports declined by 840,000 barrels per day between March and September compared with the same period last year, forcing several petrochemical plants to reduce production and draw on existing inventories.
Meanwhile, higher fuel prices are expected to weaken gasoline consumption, particularly in China and the United States. American petrol prices increased by more than 30 per cent year-on-year between March and September, contributing to an estimated 155,000-barrel-per-day reduction in US gasoline demand.
Despite the projected losses, Kpler expects global refined petroleum products demand to recover by approximately 2.5 million barrels per day in 2027 as supply chains normalise, feedstock availability improves and international travel gradually rebounds.
Diesel demand is forecast to increase by 540,000 barrels per day next year, while jet fuel consumption could rise by 400,000 barrels per day.
However, the pace of recovery will largely depend on the restoration of shipping activities through the Strait of Hormuz, as further disruptions could extend the pressure on global petroleum consumption into 2027.
