OPEC reduces 2026 forecast for global oil demand growth
OPEC lowered on Wednesday its forecast of global oil demand growth for 2026. It joined other forecasters, such as the International Energy Agency, in lowering expectations due to Iran's war.
The producer group believes that the demand will be less affected than the IEA. On Wednesday, the IEA had increased its estimate of the drop in oil consumption this year. OPEC predicted that oil consumption would increase later in the year and raised its forecast for demand growth by 2027.
The war has closed the Strait of Hormuz - a major global oil route - effectively, which has halted millions of barrels of Middle East production and sent fuel prices skyrocketing. The price spike is hitting consumers and businesses and forcing the government to take steps to conserve supply.
OPEC has said that the world's oil demand will rise by 1,17 million barrels per day (bpd) in 2026. This is down from the 1.38 million bpd previously expected. OPEC predicts that oil demand will rise by 1.54 million bpd in 2027. This is an increase of 200,000 bpd over the previous estimate. OPEC said that its forecasts for economic growth remain unchanged. OPEC stated that global oil demand will average 104.57 millions bpd during the second quarter. This is down from the 105.07 million bpd estimate last month. The previous report already 'cut the second-quarter estimation?by 500,000bpd.
OPEC+ (which includes the Organization of Petroleum Exporting Countries, Russia and other allies) had agreed to resume production increases in April. However, the closure of Hormuz made it impossible to meet the agreement. The report stated that output dropped further in April.
OPEC+ crude production?averaged 32.19 million bpd during April, a decrease of 1.74 million bpd compared to March, according to the report, which cites secondary sources that OPEC monitors its production.
The United Arab Emirates left OPEC in May. Alex Lawler is the reporter. Andrew Heavens and Mark Potter edited the story.
(source: Reuters)
