Global fossil-fuel emissions are heading for a small fall this year, but not for the reasons the climate movement might have hoped. According to analysis published by Carbon Brief on 16 September, carbon dioxide (CO2) emissions from fossil fuels are set to fall by around 0.5% in 2026 compared with 2025. The main cause is the fallout from the Hormuz crisis, in which the US–Iran war has severely disrupted trade through the Strait of Hormuz, sending oil and gas prices sharply higher.
- −0.5%Estimated change in fossil-fuel CO2 in 2026 (Carbon Brief)
- −2.5 mb/dIEA forecast fall in world oil demand in 2026
- +1.2%IEA forecast rise in global coal demand
- 2/3Share of global greenhouse gas emissions from fossil fuels
Oil and gas fall, coal rises
Carbon Brief built its estimate from the IEA’s latest forecasts for coal, oil and gas. The picture differs sharply by fuel:
- Oil. In January the IEA expected oil demand to rise by 930,000 barrels a day in 2026. By September it was forecasting a fall of 2.5 million barrels a day, or 2.4%. The IEA’s September oil report says the demand drop is 940,000 barrels a day steeper than in its previous report because negotiations between the US and Iran remain stuck and flows are not expected to normalise until next year.
- Gas. A January forecast of 2.0% growth had become a 0.6% fall by July, and Carbon Brief says pressure on demand from high prices has only grown since.
- Coal. The IEA had expected a small decline, but its September update now projects a 1.2% rise, helped by higher gas prices and a strong El Niño that is pushing up cooling demand and reducing hydropower. Carbon Brief notes this supports media claims of a “return to coal”, but that the extra emissions are more than offset by the drop in oil and gas.
How bad is the oil shock?
The IEA reports that global oil production fell by 1.6 million barrels a day in August to 100.1 million, as more than 10 million barrels a day of Gulf output remained shut in because of security risks. It says supply will drop by 5.7 million barrels a day this year and that a recovery in the Gulf is now deferred to 2027. Global observed oil inventories have fallen by 507 million barrels since February. The benchmark North Sea Dated crude price averaged $91 a barrel in August and surged to $113.48 on 9 September.
Electric vehicles benefit
As fuel prices have surged, electric vehicles have captured record shares of major car markets, from Australia and China to Europe, Indonesia and Thailand, Carbon Brief reports. In July, EV sales nearly doubled from a year earlier in what analyst Sverre Alvik of the consultancy DNV calls “new markets”, meaning countries outside China, Europe and North America. Alvik has warned that “for every month the conflict lasts, the probability of permanent oil demand destruction increases”.
The IEA, which previously expected oil demand to rebound in 2027 to well above 2025 levels, now expects use to be effectively flat over two years. That puts a question mark over its earlier expectation that global oil demand would not peak until as late as 2030. Governments that had planned to rely on imported liquefied natural gas are also signalling shifts, either towards domestic clean energy or towards continuing to use coal for longer.
A clean-power example: India
A separate Carbon Brief analysis of India, published the same day, shows how quickly clean power can change the numbers. India’s power-sector emissions were flat over the two years to the first half of 2026, the first time in more than 50 years that coal power has not grown over a two-year period, even as electricity demand rose 7%. Clean energy met all of that growth, with 77 gigawatts of solar added. India’s overall emissions still rose 3.7% in the first half of 2026 because steel and cement emissions grew by 8%, and oil and gas CO2 fell by 7%.
What to make of it
A 0.5% fall is small compared with the cuts needed to meet international climate goals, and it comes from expensive fuel rather than a deliberate policy. The IEA expects supply and demand to recover in 2027, so the fall is not guaranteed to last. But the crisis is also changing choices, from car purchases to national energy plans, and those may prove more durable than the price spike that prompted them.
