World Quietly Reduces Oil Consumption as Demand Plummets 9%

The world appears to be adapting to lower oil consumption amid surging energy prices and global supply disruptions. JPMorgan analysts estimate global oil demand has fallen by approximately 9%, or 1.5 million barrels per day, in a sudden and unexpected manner with minimal economic disruption. “The most striking finding from our meeting is not just that oil demand has fallen, but that it has likely dropped by 9% or around 1.5 million barrels per day suddenly, unexpectedly, and with very little disruption,” the analysts wrote in a client note.

The decline occurred amid the three-month closure of the Strait of Hormuz, a critical global oil trade corridor. Nevertheless, oil prices remained relatively stable at around $100 per barrel, with only a brief spike at the conflict’s outset before stabilising. JPMorgan attributes this to an already oversupplied market at the start of the year, though the most significant factor is demand destruction. Simply put, as energy prices surge, consumers reduce consumption and seek more economical alternatives.

JPMorgan analysts note the demand drop was not due to government-led energy-saving campaigns; there were no major mobility restrictions or public appeals to cut energy use. Instead, the shift resulted from economic considerations. Rising prices for petrol, diesel, and airfare have driven consumers to switch to cheaper, lower-emission transport options such as electric buses, high-speed trains, electric taxis, gas-powered vehicles, and urban mass transit networks.