OPEC has revised down its global oil demand growth projection for 2026 in its latest monthly report, becoming another major energy agency to adjust expectations following the IEA. However, OPEC's assessment of demand impact is more moderate compared to the IEA.
According to the report, global oil demand in 2026 is now expected to increase by 1.17 million barrels per day, down from the previous forecast of 1.38 million barrels per day. Meanwhile, OPEC raised its demand growth outlook for 2027 to 1.54 million barrels per day, an upward revision of 200,000 barrels per day from earlier projections, anticipating a consumption rebound in the later period.
The organization stated that global economic growth has shown resilience this year despite ongoing geopolitical tensions, particularly in the Middle East, and maintained its economic growth forecasts unchanged.
The prolonged conflict in the Middle East has led to the "effective closure" of the critical global oil transit route, the Strait of Hormuz, reducing Middle Eastern crude output by millions of barrels and driving fuel prices higher. Rising oil prices are impacting consumers and businesses, prompting governments to implement measures to conserve supply.
OPEC projects that global oil demand will average 104.57 million barrels per day in the second quarter of 2026, lower than last month's forecast of 105.07 million barrels per day. Notably, previous reports had already reduced second-quarter demand estimates by 500,000 barrels per day.
OPEC+ had previously agreed to resume production increases from April, but the closure of the Strait of Hormuz has prevented the implementation of this agreement. The report indicates that OPEC+ production declined further in April. According to secondary source data used by OPEC to monitor output, OPEC+ crude oil production averaged 33.19 million barrels per day in April, a significant drop of 1.74 million barrels per day from March. It should be noted that the April data includes the United Arab Emirates, which officially withdrew from OPEC on May 1.
Earlier the same day, the IEA noted in its latest monthly report that observed global oil inventories declined at a rate of approximately 4 million barrels per day in March and April of this year, the fastest pace on record for the agency. Cumulative supply losses since the escalation of the conflict in February have reached 12.8 million barrels per day. In April alone, global supply further decreased by 1.8 million barrels per day. The IEA raised its estimate for the decline in oil consumption this year and warned that inventories are falling at a record pace.
In contrast, OPEC's assessment of demand impact is more moderate, and it expects demand to accelerate its recovery in 2027. Analysts point out that the differing forecasts between the two agencies reflect varying judgments on the duration of the conflict and its economic impact. OPEC tends to emphasize the resilience of economic fundamentals, while the IEA focuses more on price pressures arising from short-term supply-demand imbalances.
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