OPEC cuts 2026 global oil demand growth forecast for third straight month

LONDON: OPEC has lowered its forecast for global oil demand growth in 2026 for the third consecutive month, citing the impact of the Iran conflict on energy markets, while expressing optimism that easing geopolitical tensions could support economic growth later in the year.

In its monthly oil market report released on Monday, the producer group revised its 2026 oil demand growth forecast down by 190,000 barrels per day (bpd) to 780,000 bpd, compared with its previous estimate of 970,000 bpd.

Despite the downgrade, OPEC maintained that the conflict has had a smaller impact on oil consumption than projected by other forecasters, including the International Energy Agency (IEA).

"The global economic growth dynamic in the first half of 2026 has remained broadly resilient," OPEC said, adding that reduced geopolitical tensions could provide upside to global growth in the second half of the year if energy markets and trade flows continue to stabilise.

The report also raised OPEC's forecast for oil demand growth in 2027 to 1.94 million bpd, an increase of 210,000 bpd from its previous projection.

The Strait of Hormuz, a key global oil transit route, remained disrupted for months during the Iran conflict, restricting millions of barrels of Middle Eastern crude production. Although output had started recovering following an interim peace agreement between Iran and the United States, renewed military strikes have revived concerns over oil shipments.

OPEC+—which includes OPEC members and allies such as Russia—had planned to gradually increase production from April, but the closure of the Strait of Hormuz prevented several producers from reaching their agreed output targets.

According to secondary sources cited in the report, OPEC+ crude production rose to 36.28 million bpd in June, an increase of about 3 million bpd from May, as Gulf producers resumed output that had been curtailed during the Iran conflict. The May production data includes the United Arab Emirates, which exited OPEC and OPEC+ on May 1.