OPEC has lowered its forecast for global oil demand growth in 2026, citing the impact of the Iran conflict and its effect on fuel prices, supply flows and economic activity.
The producer group now expects world oil demand to rise by 1.17 million barrels per day in 2026, down from its previous forecast of 1.38 million barrels per day, according to Reuters. The lower forecast bring OPEC closer to the view of other market watchers, including the International Energy Agency, which has also trimmed its expectations for oil demand this year.
Much of the uncertainty remains tied to the Strait of Hormuz, a key shipping route for global oil and fuel exports. Disruptions linked to the conflict have affected supply flows from the Middle East and contributed to higher energy prices. OPEC now expects global oil demand in the second quarter to average 104.57 million barrels per day, lower than its earlier estimate of 105.07 million barrels per day.
OPEC’s latest estimate still points to growth in oil demand, but at a slower pace than previously expected. The group said the global economy has remained resilient despite geopolitical tensions, particularly in the Middle East. At the same time, higher fuel prices and supply pressures are weighing on consumers, businesses and governments.
Reuters reported that OPEC+ crude output averaged 33.19 million barrels per day in April, down 1.74 million barrels per day from March. OPEC+ includes members of the Organization of the Petroleum Exporting Countries and allies such as Russia.
Output fell even though OPEC+ had planned to start increasing production again from April. Ongoing disruption in and around the Strait of Hormuz has complicated those efforts, limiting how much additional supply could reach the market.
OPEC also raised its oil demand growth forecast for 2027. The group now expects demand to rise by 1.54 million barrels per day next year, an increase of 200,000 barrels per day from its previous forecast. This suggests OPEC expects part of the current demand weakness to ease if supply routes stabilize and prices become less volatile
The IEA has taken a more cautious position. Its May Oil Market Report forecast that world oil demand would contract by 420,000 barrels per day in 2026, with the sharpest decline expected in the second quarter. The IEA said higher prices, weaker economic conditions and demand-saving measures were affecting fuel use, particularly in petrochemicals and aviation.
OPEC’s revised forecast still indicates that global oil consumption is expected to increase in 2026, although at a slower rate than previously projected. The outlook reflects the effects of geopolitical tensions, higher energy costs and ongoing disruptions to supply chains. The main question for the rest of 2026 is how quickly supply routes normalize, and whether higher prices continue to weigh on fuel consumption.