Global oil demand is dropping, but US drivers keep buying more gas

NEW YORK (AP) — Global oil demand is set to decline this year for the first time since the height of the COVID-19 pandemic in 2020, according to a report from the International Energy Agency.

The drop, which the agency expects to amount to about 1 million barrels per day in 2026, is due to higher oil prices and disruptions to physical supply that weighed heavily, but unevenly, on various parts of the world, the report said.

The supply disruptions were caused by the war between the U.S. and Iran, which left ships loaded with crude oil stranded in the Persian Gulf for more than three months, unable to safely travel through the Strait of Hormuz, a major route for oil and gas shipments.

“The future of Hormuz is probably more uncertain today than it was at the beginning of the war," said Jim Burkhard, vice president and head of crude oil research at S&P Global Energy.

Burkhard said Iran is still trying to control the strait, while the U.S. has not been able to fully restore normal operations, making a return to prewar conditions unlikely.

Global oil demand averaged just 97.9 million barrels per day in May, down 5.3 million barrels per day from a year earlier. Much of the decline was in Asia, which relies heavily on oil from the Middle East.

China’s decrease of 1.5 million barrels per day, representing a 9% decline, was by far the largest globally, the report said.

But the main exception to the global slump in oil usage was in the U.S., where gasoline use increased in the second quarter of 2026, despite the fact that pump prices were about 50% above their prewar levels in May, the report said.

China decided to massively cut down on purchasing oil from the global market as the price rose during the spring, reducing its consumption by almost 6 million barrels per day, Burkhard said.

“What China said is, ‘You know what, prices are high, there’s a crisis. We have this huge inventory stock, we can sustain demand. We’re just going to cut by 50% the amount of crude oil we buy,’” Burkhard said.

One way China cut back its consumption was to temporarily stop filling up its strategic petroleum reserve, which it had been adding to at a rate of nearly 1 million barrels per day, said Daniel Sternoff, senior fellow at the Center on Global Energy Policy at Columbia University.

The crisis also accelerated China's saving of road transportation fuels as its use of electric vehicles grew, he said. “What we’re tracking so far, at least since the crisis began, is China is probably on track to see somewhere between 500,000 and 600,000 barrels per day worth of demand losses for gasoline and diesel. So that’s pretty significant,” Sternoff said.

A fragile ceasefire enabled some ships to exit through the Strait of Hormuz in June, which allowed more oil on the market. That led to lower oil prices.

But even after tensions escalated between the U.S. and Iran earlier this month, prices didn't spike.

“This gray zone conflict that the U.S. and Iran are in, it’s not really a shock to the oil market,” Burkhard said. “It can push prices up and down a few dollars like it did the other day, but it’s not the same shock that it was in early March when Iran did what many thought was unthinkable.”

Another reason oil prices didn't spike very high after recent military strikes is that there were fewer buyers available to scoop up the supply that had become available, experts said.

On top of China dramatically reducing consumption, several refineries in Russia were unable to process crude after being damaged in drone hits from Ukraine, and refineries in the Middle East remained damaged from the war, Burkhard said. As a result, prices for gasoline, diesel and other refined products have stayed inflated longer than oil prices, he said.

“There’s this gush of supply of crude oil being made available to the market, and there’s simply less demand for that crude oil,” Burkhard said.

Gasoline prices surpassed $4.50 on average for a gallon of regular in the U.S. in May, rising more than 50% since the start of the war, according to AAA data. But that didn't stop drivers from hitting the road; in fact, gasoline consumption rose in the U.S. during the second quarter of the year.

One reason may be because the percentage of household income spent on gasoline in the U.S. has been declining for years, Sternoff said. Plus, many people have been transitioning from remote work to in-office jobs, he added.

“Even though it’s a really political price that people pay a lot of attention to, if you are in the higher quintiles of income in the U.S., you might grumble about it, but you’re not really driving less just because of that increase in prices,” Sternoff said.

Commercial vessels are seen in the Strait of Hormuz off Bandar Abbas, Iran, Tuesday, June 30, 2026. (Amirhosein Khorgooi/ISNA via AP)

PORTLAND, Maine (AP) — Graham Platner on Friday submitted his paperwork to formally withdraw from Maine’s U.S. Senate race, officially ending an upstart yet troubled campaign whose dissolution threatens Democrats’ pursuit of chamber control.

Platner’s paperwork was received by the Maine secretary of state's office and reflected shortly thereafter in its online withdrawal list.

In a letter to the secretary of state's office, which Platner also posted on social media, he wrote that the Mainers who had nominated him “voted for a new kind of politics” that is “representative of people down here in the real world — not billionaires, oligarchs, or the political establishment.” It was the same outsider chord that had been a trademark of his tumultuous campaign, in which Platner drew backing from progressive leaders including Vermont Sen. Bernie Sanders and U.S. Rep. Ro Khanna of California.

“I seek to further the movement we have built together and the future we believe in,” he went on, without detailing what that meant.

Maine is considered a key state for control of the narrowly divided Senate, and Democrats were desperate for a candidate capable of defeating Republican Sen. Susan Collins.

The formal withdrawal comes two days after Platner said he would quit the race, facing an allegation of sexual assault that he has denied. Maine Democrats are seeking a new nominee, and several hopefuls have already begun jockeying for position.

State law includes a provision for Democrats to replace Platner before the general election but the replacement must by named by July 27.

Just before Platner’s Wednesday announcement, more than 100 state Democratic Party committee members signed off on holding a nominating convention, in the event of his withdrawal, to choose the nominee. The state party has not publicly released details of when the convention will be held. Officials with the party did not immediately respond to a request for comment Friday.

Several Democrats have announced runs for the Senate nomination this week. They include three candidates who lost the June primary for the governor nomination — former Maine Center for Disease Control and Prevention director Nirav Shah, Secretary of State Shenna Bellows and former Maine Senate President Troy Jackson.

Others who have announced runs include Maine Beer Company co-founder Dan Kleban; former 2nd Congressional District candidates Jordan Wood and Paige Loud; and former Maine Senate candidates David Costello and Andrea LaFlamme. State Rep. Valli Geiger has also expressed interest in the post but has not formally announced.

This story has been corrected to show that state Rep. Valli Geiger has expressed interest in running but has not formally announced.

Kinnard reported from Columbia, South Carolina.

Campaign flyers for former Democratic candidate for U.S. Senate Graham Platner are seen at his headquarters Thursday, July 9, 2026, in Ellsworth, Maine. (AP Photo/Robert F. Bukaty)