LONDON: OPEC has lowered its forecast for global oil demand growth in 2026, citing the economic and energy market impact of the ongoing Iran conflict and disruptions in the Middle East.
In its latest monthly report released on Wednesday, OPEC projected global oil demand to increase by 1.17 million barrels per day (bpd) in 2026, down from its previous estimate of 1.38 million bpd.
The producer group, however, raised its forecast for 2027, expecting global oil demand to grow by 1.54 million bpd — an upward revision of 200,000 bpd from earlier projections — indicating expectations of a longer-term recovery in consumption.
The revised outlook follows similar downward demand assessments by the International Energy Agency (IEA), which earlier increased its estimate of the decline in oil consumption this year due to escalating geopolitical tensions.
The ongoing conflict involving Iran has effectively disrupted traffic through the Strait of Hormuz, one of the world’s most critical oil shipping routes. The closure has curtailed millions of barrels of Middle Eastern oil output and triggered a sharp rise in global fuel prices, placing additional pressure on consumers, businesses, and governments worldwide.
Despite the geopolitical uncertainty, OPEC stated that the global economy continues to show resilience.
“Global economic growth continues to show resilience for this year despite geopolitical tensions, particularly in the Middle East,” the report noted, while keeping its broader economic growth forecasts unchanged.
According to the report, global oil demand is expected to average 104.57 million bpd in the second quarter of 2026, compared to the previous estimate of 105.07 million bpd. The earlier report had already reduced the second-quarter forecast by 500,000 bpd.
Meanwhile, production within the OPEC+ alliance has also declined. OPEC+ — which includes OPEC members and allies such as Russia — had agreed to gradually increase oil production beginning in April. However, the closure of the Strait of Hormuz has hampered implementation of those plans.
The report showed that OPEC+ crude oil output fell sharply in April, averaging 33.19 million bpd — a decline of 1.74 million bpd compared to March levels.
The April production figures also included the United Arab Emirates, which officially exited OPEC on May 1.
By Reuters
