The International Energy Agency (IEA) has reported that Nigeria’s oil demand dipped by nearly 30% year-on-year in July as the Middle East conflicts disrupted the crude oil merchandize trade pushed up oil prices in the global markets.
The agency, in its just released October Oil Market Report, disclosed that Nigeria’s oil consumption declined by 150,000 barrels per day (b/d) during the month, as the conflict continued to impact negatively on the energy markets and fuel consumption in some parts of Africa and Southeast Asia.
Based on the current uncertainties in the markets, the IEA projected that Nigeria’s oil demand would decline by almost 60,000 b/d in 2026 to 470,000 b/d before recovering by a similar volume in 2027.
The report reflected that after its estimated growth of 3.4 per cent in the 12 months before the Middle East conflicts, Africa’s oil demand also reversed from growth to contraction with the continent’s oil consumption declining by 2.5 per cent year-on-year between March and August 2026.
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The IEA partly attributed the pressure to Africa’s dependence on imported refined petroleum products, particularly diesel and gasoline, which has left the region vulnerable to supply disruptions and rising prices.
The report also indicated that trade patterns had also shifted towards lower imports and increased product exports, including middle distillate shipments from Nigeria, as Egypt, Africa’s largest oil consumer, recorded a demand decline of 110,000 b/d, or 12.3 per cent, in the second quarter.
It projected that Egypt’s full-year consumption would fall by 130,000 b/d, partly because of reduced fuel oil use as natural gas supplies stabilise. Demand is expected to recover by only 40,000 b/d in 2027.
In a related development, the IEA reported that Southeast Asia also recorded a sharp decline in oil consumption since the conflict commenced, and estimated that oil demand in the region fell by 260,000 b/d, or 3.7 per cent year-on-year, between March and August 2026, against pre-war expectations of 2.3 per cent growth.
The agency maintained that the roughly six-percentage-point deterioration showed the region’s exposure to disruptions affecting shipments through the Strait of Hormuz, with apparent demand declining by an even steeper 6.3 per cent, suggesting substantial unobserved withdrawals from petroleum product inventories.
The IEA expected Southeast Asian region’s oil demand to decline by 160,000 b/d, or two per cent, in 2026 before rebounding by 270,000 b/d in 2027, adding that the projected recovery is expected to be supported by economic growth in Indonesia, Vietnam, Malaysia, the Philippines and Thailand.
Conversely, the report indicated that South American oil demand remained relatively resilient, increasing by an estimated 1.9 per cent year-on-year between March and August, slightly above the 1.7 per cent growth recorded in the preceding six months.
The agency noted that the region had been less exposed to disruptions in Middle Eastern supplies because most of its imported crude oil and refined petroleum products originate from the Atlantic Basin, as Brazilian oil consumption rose by an estimated 110,000 b/d, or 3.2 per cent year-on-year, in August.
The IEA projected that South American demand would grow by 60,000 b/d in 2026, with Brazil accounting for most of the increase, followed by a further 40,000 b/d in 2027.
The report showed that Southeast Asia, Africa and South America together accounted for about 17.8 million b/d of global oil demand in 2025, however, the agency noted that assessing consumption trends remained challenging because timely data reporting was limited across many emerging economies.
