Global Fossil Fuel Emissions Set to Fall 0.5% in 2026 After Hormuz Oil Shock

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Summary · why it matters

Global emissions from fossil fuels are set to fall by roughly 0.5% this year, which would be the first annual decline since the pandemic year of 2020, according to Carbon Brief. The drop follows a demand shock set off when strikes on Iran began in late February and tanker traffic through the Strait of Hormuz seized up, with Brent crude settling at $104.82 a barrel on Sept. 17 and the national average for a gallon of regular reaching $4.4386 the same day, according to AAA. The International Energy Agency now expects global oil consumption to shrink by 2.5 million barrels per day in 2026, a 2.4% drop from 2025 levels, a swing of roughly 3.4 million barrels a day from its January forecast of 930,000 barrels per day of growth. Expensive gas pushed power systems in Europe, Japan, Korea and China back toward coal, and the resulting jump in coal emissions is more than offset by declines for oil and gas, with global coal demand now set to rise 1.2% this year to a record 8.94 billion tonnes, according to the IEA. Fossil carbon dioxide emissions hit a record 38.1 billion tonnes in 2025, according to the Global Carbon Project, and the agency has called the loss of Gulf barrels the largest supply disruption in the history of the global oil market.

Impact on assets 4

Energy Transition & Power Demand▲ · 1 stocks
Exxon Mobil Corp
XOM
▲ PositiveSupplyrelevance

Hormuz disruption removes Gulf barrels, the largest supply disruption in oil-market history, supporting prices for Exxon's crude output.

Financials▲ · 1 stocks
Others▲ · 2 stocks
⛏Brent Crude Oil Futures
BRENT
▲ PositiveSupplyrelevance

Hormuz supply disruption drove Brent to settle at $104.82 a barrel, the article's central oil-shock event.

⛏Crude Oil WTI Futures
WTI
▲ PositiveSupplyrelevance

Strikes on Iran and seized-up Hormuz tanker traffic cut Gulf supply, lifting WTI crude prices.

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