J.P. Morgan Sees Oil Demand Losses Widen to 5.6 Million Bpd in May
Updated
Updated · Rigzone News · Jun 2
J.P. Morgan Sees Oil Demand Losses Widen to 5.6 Million Bpd in May
3 articles · Updated · Rigzone News · Jun 2
5.6 million barrels per day of global oil demand was lost in May, up from 4.3 million in April and 2.8 million in March, J.P. Morgan said, signaling a deepening hit to consumption.
40%-60% of the decline came from weaker petrochemical feedstock demand, with the rest from transport fuels, as consumers shifted toward cheaper alternatives such as electric buses, rail and gas-powered trucks.
China may have accounted for 1.5 million barrels per day of lost demand—about 9%—while Europe also absorbed near-$120 oil with limited disruption as strong solar and wind output pushed electricity prices lower.
16.4 million barrels per day of supply was lost in May after Strait of Hormuz closures and a U.S. blockade that halted Iranian exports, forcing the market to balance through 7.4 million barrels per day of inventory draws and demand destruction.
J.P. Morgan said the macroeconomic fallout remains contained for now—cutting 2026 global growth by about 24 basis points and raising inflation by roughly 100 basis points—but warned the shock could accelerate a longer-term decoupling of growth from oil use.
Is the world quietly breaking its oil addiction, or is a painful price shock just weeks away?
Are consumers' quiet choices creating a post-oil world faster than experts predicted?
From Crisis to Transition: The 2026 Oil Supply Shock and Its Lasting Impact on Global Energy and Economies
Overview
In May-June 2026, the global oil market faces a severe crisis as the ongoing Iran war disrupts Middle East oil production, causing a dramatic supply shortfall and forcing the International Energy Agency to revise its outlook. This conflict has led to a sharp reduction in crude availability and an unprecedented drawdown of global oil inventories to meet demand. As a result, the world is experiencing both immediate supply shocks and significant demand destruction, with major economic and social impacts. The crisis highlights the fragility of global energy systems and the urgent need for more resilient and diversified energy strategies.