OPEC has revised its forecast for global oil demand growth in 2026 downward. Following the impact of the conflict in Iran, multiple institutions, including the International Energy Agency, had previously lowered their related forecasts, and OPEC has now followed suit.
Compared to the International Energy Agency, OPEC believes the impact on oil demand is relatively smaller. The IEA had earlier on Wednesday raised its estimate for the decline in oil demand this year. OPEC stated that subsequent oil consumption is expected to rebound and has increased its forecast for oil demand growth in 2027.
The conflict in Iran has effectively halted operations at the Strait of Hormuz, a critical global oil chokepoint, leading to a sharp reduction of millions of barrels per day in Middle Eastern crude production and a significant surge in fuel prices. The sharp rise in oil prices has impacted household consumption and business operations, prompting governments to implement energy conservation and supply security measures.
OPEC indicated that it expects global daily oil demand in the second quarter of this year to be 104.57 million barrels, lower than the previous month's forecast of 105.07 million barrels. In its prior report, the second-quarter demand estimate had already been lowered by 500,000 barrels per day.
OPEC stated, "Despite geopolitical tensions in regions such as the Middle East, global economic growth this year continues to show resilience," and maintained its existing economic growth forecast.
For 2027, OPEC projects global oil demand to increase by 1.54 million barrels per day, an upward revision of 200,000 barrels per day from its previous expectation.
OPEC+, which consists of OPEC and allies including Russia, had previously reached an agreement to resume production increases starting in April. However, the halt in operations at the Strait of Hormuz has prevented this production increase agreement from being implemented. The report noted a further decline in crude production in April.
Citing secondary source data used to monitor production, OPEC reported that OPEC+ crude production averaged 33.19 million barrels per day in April, a decrease of 1.74 million barrels per day compared to March.
The April production statistics still include the United Arab Emirates, which exited OPEC on May 1st.
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