OPEC lowers its 2026 oil demand growth forecast for the second consecutive month.
```
OPEC again lowers its global oil demand growth forecast for next year, as the blockade of the Strait of Hormuz triggered by the Iran war is reshaping the global energy supply and demand landscape.
In its latest monthly oil market report released on Thursday, OPEC lowered its forecast for global oil demand growth in 2026 to 970,000 barrels per day, down from the previous estimate of 1.17 million barrels per day, marking the second consecutive monthly downgrade. OPEC+ output further shrank in May, with Iran seeing the most significant decline.
Soaring fuel prices are suppressing demand from global consumers and businesses. Mainstream agencies, including the U.S. Energy Information Administration (EIA) and the International Energy Agency (IEA), are all predicting a decline in oil demand this year. While OPEC remains more optimistic than these agencies regarding demand prospects, the trend of downgrades is now consistent.
Meanwhile, OPEC raised its demand growth forecast for 2027 to 1.73 million barrels per day, up 190,000 barrels from last month's forecast, suggesting the organization expects consumption to rebound strongly once the shock of war subsides.
Demand Downgrade: India and the Middle East as Main Drag
OPEC did not specify the reasons for the downgrade in its report, but details reveal the sources of pressure. The forecast for India's demand growth was cut by 60,000 barrels per day, and the Middle East's consumption forecast was lowered by 40,000 barrels per day. The combined effect of both forms the main source of this revision.
The impact on Middle East demand is particularly direct. OPEC estimates that in the first month of the Iran war (March this year), oil consumption in the Middle East region declined by about 500,000 barrels per day compared to a year earlier. The “downside risk” facing regional demand was attributed to the "ongoing oil market conditions" and it was noted that the ultimate impact will depend on the "duration and severity of the disruption."
As for the global economy overall, OPEC maintains its previous judgment, stating that "despite ongoing geopolitical tensions, the global economy remains resilient in the first half of 2026," with related economic growth forecasts unchanged.
Supply Decline: Strait of Hormuz Blockade Derails Production Increase Plans
The Strait of Hormuz is one of the world’s most important oil shipping routes; its blockade has prevented several million barrels of daily production from leaving the Middle East. OPEC+ had previously agreed to resume production increases starting in April, but the blockade rendered these plans infeasible.
According to secondary source data cited by OPEC, OPEC+ crude oil production, including Mexico, averaged 33.13 million barrels per day in May, a decrease of about 190,000 barrels from April. Iran was the member with the largest decline, and tanker tracking data show Iran’s May exports plummeted due to the U.S. blockade.
It is worth noting that May’s figures still include the UAE’s output, even though the country officially withdrew from OPEC and OPEC+ on May 1.
Risk Warning and DisclaimerThe market carries risks, and investment should be approached cautiously. This article does not constitute personal investment advice and has not considered the individual investment objectives, financial circumstances, or needs of specific users. Users should assess whether any opinion, viewpoint, or conclusion in this article fits their specific situation. Investing based on this information is at the user’s own risk. ```