Reported by Weng Patrick Atokor l Journalist at Weng Global
The ongoing US-Iran conflict is expected to reduce global demand for refined petroleum products by approximately 2.4 million barrels per day in 2026, as supply disruptions, elevated fuel prices and restrictions on shipping and aviation continue to affect energy consumption across international markets.
The projection, published by energy intelligence and commodities analytics firm Kpler, highlights the growing economic consequences of the conflict beyond the Middle East, with disruptions to energy supply chains affecting industries, transportation networks and consumers worldwide.
In its October 22, 2026, analysis, Kpler attributed the expected decline to a combination of reduced availability of petroleum feedstocks, higher retail fuel prices, government-led conservation measures and interruptions to shipping and aviation activities.
The company also forecast that global demand for refined petroleum products could recover by approximately 2.5 million barrels per day in 2027 as supply conditions improve, trade routes normalise and fuel prices gradually ease.
Diesel and Gasoline Among the Products Facing Declining Demand
According to Kpler’s projections, gasoil and diesel are expected to experience the largest decline among refined petroleum products in 2026, with demand forecast to fall by approximately 500,000 barrels per day.
Liquefied petroleum gas (LPG), commonly used for cooking and industrial purposes, is projected to record a reduction of 460,000 barrels per day, while naphtha consumption is expected to decline by 350,000 barrels per day.
Other petroleum products are also expected to experience significant reductions.
The projections include:
- Gasoil and diesel: Demand decline of 500,000 barrels per day.
- Liquefied petroleum gas (LPG): Demand decline of 460,000 barrels per day.
- Naphtha: Demand decline of 350,000 barrels per day.
- Gasoline: Demand decline of 330,000 barrels per day.
- Jet fuel and kerosene: Demand decline of 200,000 barrels per day.
- Fuel oil: Demand decline of 120,000 barrels per day.
These figures illustrate how the conflict is affecting different segments of the global petroleum market, from household energy consumption to industrial production, road transportation, international aviation and maritime operations.
How the US-Iran Conflict Is Affecting Global Fuel Consumption
The impact of the conflict extends beyond the direct disruption of oil production and exports.
Kpler’s analysis identifies several channels through which the crisis is weakening demand for refined petroleum products.
One major factor is the reduced availability of feedstocks required by petrochemical manufacturers. Shortages of LPG and naphtha have affected industrial operations, particularly in Asia, where several petrochemical facilities depend on imported supplies.
When manufacturers struggle to secure sufficient raw materials, they may reduce production, operate below capacity or draw down existing inventories. These adjustments subsequently reduce demand for petroleum products used in industrial processing.
Higher fuel prices are another important factor.
As transportation and energy costs increase, households and businesses face greater pressure to manage consumption. Motorists may reduce unnecessary journeys, logistics companies may adjust operations, and industries may seek alternative energy sources where possible.
Government-led conservation measures in some markets have also contributed to weaker consumption.
The aviation industry faces additional difficulties because airspace restrictions, disruptions to major aviation hubs and the withdrawal of some international carriers from Middle Eastern routes have affected jet fuel demand.
Maritime transportation has also been affected, particularly through the displacement of bunkering activities from major Gulf shipping centres.
Together, these developments have created a broader reduction in refined petroleum consumption across several regions.
Asia Faces Significant Pressure from Supply Disruptions
Asia is among the regions facing substantial consequences from the disruption because of its dependence on imported petroleum feedstocks and energy supplies from the Middle East.
Kpler estimates that Asian LPG demand will decline by 370,000 barrels per day in 2026, with China and India accounting for much of the reduction.
China’s LPG demand is projected to decline by 230,000 barrels per day, while India’s is expected to fall by 100,000 barrels per day.
The impact on China is particularly significant because a substantial share of its seaborne LPG imports is exposed to shipping routes passing through the Strait of Hormuz.
Reduced availability of these supplies has affected petrochemical operations, forcing some manufacturers to lower production.
Naphtha consumption has also suffered. Kpler estimates that global demand will decline by 350,000 barrels per day in 2026, with Asia accounting for approximately 340,000 barrels per day of the reduction.
The disruption demonstrates how instability in one strategically important energy-producing region can affect manufacturing activities across international supply chains.
Strait of Hormuz Remains Central to the Energy Crisis
The Strait of Hormuz remains central to the disruption because of its importance to international oil and petroleum product transportation.
The waterway connects the Persian Gulf with the Gulf of Oman and the wider international shipping network. It is a major route for energy exports from several Middle Eastern producers.
Disruptions to shipping through the strait have affected the movement of crude oil and refined petroleum products, forcing buyers and suppliers to adjust transportation arrangements and seek alternative sources.
A November 3 report from the US Energy Information Administration (EIA) provides further evidence of the effect on the global refining industry.
The agency reported that global crude oil refinery inputs fell by 4.8 million barrels per day in the second quarter of 2026, representing a 6 per cent decline following the outbreak of conflict in the Middle East in late February.
However, refinery throughput increased by 1.8 million barrels per day in the third quarter as refiners adjusted to changing trade flows and alternative supply arrangements.
China recorded the largest national decline, with refinery crude oil inputs falling by 2.1 million barrels per day in the second quarter and a further 800,000 barrels per day in the third quarter.
The EIA also reported that refinery inputs in Kuwait, the United Arab Emirates, Saudi Arabia and Iran declined during the second quarter because of restrictions on exports through the Strait of Hormuz.
Although some recovery followed, global refinery inputs remained approximately 5 per cent below their levels during the corresponding period of 2025. U.S. Energy Information Administration (EIA)
International Energy Agency Warns of Wider Market Consequences
The International Energy Agency (IEA) has also documented the wider consequences of the conflict for global energy markets.
In its August 2026 Oil Market Report, the agency projected that global oil demand would decline by an average of 1.6 million barrels per day during 2026.
It attributed the weakness to continuing disruptions around the Strait of Hormuz, reduced availability of petroleum products and elevated fuel prices.
The IEA also reported that global oil inventories had fallen by 410 million barrels between the end of February and the end of July 2026, equivalent to an average reduction of approximately 2.7 million barrels per day over that period.
These figures underline the pressure that supply disruptions have placed on international energy markets.
However, the IEA’s forecast covers total oil demand, while Kpler’s 2.4-million-barrel projection specifically concerns refined petroleum products. The two figures therefore measure different categories and should not be treated as directly interchangeable.
What the Forecast Means for Africa and Nigeria
The expected decline in global refined fuel demand has implications for African economies, particularly countries that depend heavily on imported petroleum products or imported feedstocks for industrial activities.
Higher fuel prices and interruptions to international supply chains can increase transportation costs, raise the cost of manufacturing and place additional pressure on businesses and household budgets.
For African countries with limited domestic refining capacity, disruptions in international petroleum markets can expose weaknesses in energy security and increase dependence on alternative suppliers.
Nigeria occupies an important position in this discussion because of its oil-producing status and growing domestic refining capacity.
The country’s ability to refine more petroleum products locally could help reduce exposure to international supply disruptions, although domestic production does not completely insulate the economy from global crude oil prices, shipping costs and changes in international petroleum markets.
There is also an important distinction between declining global fuel demand and declining fuel prices.
Although lower consumption can reduce pressure on demand, supply shortages and transportation disruptions can keep prices elevated. Consequently, a reduction in global petroleum demand does not automatically mean consumers will experience cheaper petrol, diesel or cooking gas.
For African governments, the developments reinforce the importance of diversifying energy sources, improving domestic refining capacity, strengthening storage infrastructure and reducing excessive dependence on vulnerable international supply routes.
Kpler Projects a 2.5 Million-Barrel Recovery in 2027
Despite the expected contraction in 2026, Kpler anticipates a recovery in refined petroleum products demand during 2027.
The company forecasts an increase of approximately 2.5 million barrels per day as international trade flows improve, feedstock availability increases, fuel prices ease and aviation activity gradually recovers.
However, Kpler cautions that the recovery will not necessarily restore the global petroleum market to its pre-conflict structure.
Some changes are expected to persist because of longer-term developments in the energy industry.
These include the growing adoption of electric vehicles, increased use of liquefied natural gas in transportation, the expansion of electric trucks and the replacement of fuel oil with natural gas in some power-generation markets.
The fuel oil market is particularly vulnerable to these structural changes. Kpler expects global fuel oil demand to decline by another 10,000 barrels per day in 2027, making it the only major refined petroleum product expected to remain in global decline.
The pace of recovery will also depend on how quickly shipping activity through the Strait of Hormuz returns to normal.
A faster recovery in tanker movements could improve feedstock availability, ease supply pressures and support stronger consumption. Continued disruption, however, could prolong the effects on industrial production, transportation and international trade.
What Happens Next?
The outlook for global petroleum consumption will depend largely on developments in the Middle East and the ability of international energy markets to adjust to the disruption.
Energy companies, governments, refiners and shipping operators will continue to monitor supply availability, transportation costs and the movement of petroleum products across major trade routes.
For consumers and businesses, the immediate concern remains the potential impact of supply constraints and elevated fuel prices on living costs, industrial operations and international transportation.
Kpler’s forecast suggests that even if market conditions improve during 2027, the consequences of the US-Iran conflict could extend beyond the immediate period of hostilities.
The developments also highlight the vulnerability of the global energy system to geopolitical tensions, particularly when disruptions affect strategically important shipping routes.
For Africa and other energy-importing regions, the crisis provides another reminder that energy security depends not only on access to petroleum resources but also on reliable refining capacity, transportation infrastructure and diversified supply networks.
The projected 2.4-million-barrel-per-day reduction is therefore more than an energy-market statistic. It reflects the wider economic consequences of geopolitical instability and the challenges facing countries and industries that depend on reliable access to petroleum products.
Weng Global – Stories beyond borders
Sources
- Kpler – Refined Products Demand to Fall 2.4 mbd in 2026 Before an Uneven 2027 Recovery, October 22, 2026.
- US Energy Information Administration (EIA) – Global Refinery Inputs Fell Sharply in the Second Quarter of 2026 Before Modest Recovery, November 3, 2026.
- International Energy Agency (IEA) – Oil Market Report, August 2026.
- The Punch – US-Iran Conflict to Cut Global Fuel Demand by 2.4mbpd, November 5, 2026.
