Eric Nuttall Says 1.5 mbpd Drop Could Rebalance Oil
Eric Nuttall is now tied to a forecast that global oil demand could fall by 1.5 mbpd in the April-June 2026 quarter, after PL Capital said high crude prices and supply disruptions are already pushing consumption lower. For oil-importing countries, that means tighter transport costs now and less room to rely on alternate supply.
20 million barrels in play
20 million barrels per day of supply has been disrupted by the West Asia conflict, according to PL Capital, with the Strait of Hormuz handling nearly 20 percent of the world’s oil trade. The report said that disruption leaves a shortfall of about 4.8 mbpd, and the gap is likely to be closed by demand destruction rather than a quick supply fix.
Amnish Aggarwal, co-head of institutional equities at PL Capital, said: “We are already observing initial signs of demand destruction due to high crude prices impacting global consumption. This will help restore market balance and reduce prices going forward.”
India’s oil marketers gain
Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation were singled out by PL Capital as beneficiaries if crude prices gradually stabilise and marketing spreads widen. The firm maintained an Accumulate rating on all three, pointing to a setup where lower crude can support margins even if volumes remain moderate.
The same report said rerouting of supplies, release of strategic reserves and selective transit have only partly offset the shock. The United States and China are seen as less affected in the near term because they possess ample supplies, while oil-importing countries face more pressure from supply constraints, higher transportation costs and the inability to procure from alternate sources.
IEA’s 2026 demand view
1.5 mbpd is the IEA’s forecast decline in global oil demand for the April-June 2026 quarter, the report said, a move PL Capital treats as a sign that higher fuel costs are doing the work of rebalancing the market. If demand keeps slowing while supply adjustments continue, crude prices should gradually stabilise rather than remain at levels that keep pump prices elevated.
