OPEC again lowers 2026 global oil demand growth forecast

SEATTLE (Oil Monster): OPEC on Thursday lowered its 2026 global oil demand growth forecast to 970,000 barrels per day in its monthly market report, marking the producer group’s second consecutive downward revision as the fallout from the Iran war continues to ripple through energy markets.

OPEC cuts 2026 oil demand growth forecast again

The revised outlook represents a reduction from OPEC’s previous forecast of 1.17 million barrels per day of demand growth this year. Even so, the group still expects a smaller hit to global consumption than other forecasters, including the U.S. Energy Information Administration and the International Energy Agency.

OPEC expects stronger rebound in 2027

While trimming its 2026 outlook, OPEC raised its forecast for 2027, now expecting demand growth of 1.73 million barrels per day. That is 190,000 barrels per day above its prior estimate and reflects the group’s view that consumption will recover once current geopolitical disruptions begin to ease.

Hormuz closure remains central to the oil market outlook

The war has effectively closed the Strait of Hormuz, one of the world’s most important oil transit routes, curbing millions of barrels per day of Middle East supply. The resulting surge in fuel prices is increasing pressure on consumers and businesses worldwide and remains a core factor in the demand outlook.

Economic assumptions remain unchanged despite tensions

OPEC said global economic performance in the first half of 2026 has remained resilient despite ongoing geopolitical stress, leaving its broader economic growth forecasts unchanged. That contrasts with the EIA and IEA, both of which expect oil demand to decline this year because of the war.

OPEC+ output slips as Hormuz disruption blocks supply increase

OPEC+ had agreed to resume output increases from April, but the closure of Hormuz has made it impossible to bring more barrels to market. According to the report, OPEC+ crude output averaged 33.13 million barrels per day in May, down 190,000 barrels per day from April based on secondary-source data.

Iran posts the largest production decline in May

Iran recorded the biggest drop in output among OPEC+ members, with tanker data showing a sharp fall in exports in May due to a U.S. blockade. The May total also includes the United Arab Emirates, which left OPEC and OPEC+ on May 1.

Courtesy: www.reuters.com