The Organisation of the Petroleum Exporting Countries (OPEC) on Wednesday lowered its forecast for global oil demand growth in 2026 due to the Iran war.
According to the cartel, world oil demand will rise by 1.17 million barrels per day in 2026, down from the previous 1.38 million barrels per day.
OPEC said consumption would rebound later and raised its demand growth forecast for 2027. For next year, it expects oil demand to rise by 1.54 million barrels per day, up 200,000 barrels per day from the previous forecast.
OPEC joins other forecasters, such as the International Energy Agency (IEA), in cutting expectations due to the war that started in February.
The producer group sees a smaller hit to demand than the IEA, which earlier on Wednesday increased its estimate of the decline in oil use this year.
The IEA sees demand falling by 420,000 barrels per day this year, compared with a previous forecast of an 80,000 barrels per day drop. Overall, global oil supply will fall by around 3.9 million barrels per day across 2026 due to the war, slashing its previous forecast, which had projected a 1.5 million barrels per day drop.
The war has effectively closed the Strait of Hormuz, a key global oil route, curbing millions of barrels of Middle East output and sending fuel prices soaring. The surge is hitting consumers and businesses, and prompting government steps to conserve supplies.
“The global economic growth continues to show resilience for this year despite geopolitical tensions, particularly in the Middle East,” OPEC said, leaving its economic growth forecasts unchanged.
Global oil demand is expected to average 104.57 million barrels per day in the second quarter, down from the 105.07 million barrels per day forecast last month, OPEC said. The previous report had already cut the second-quarter estimate by 500,000 barrels per day.
The wider OPEC+, which groups the OPEC and allies such as Russia, had agreed to resume output increases from April, but the closure of Hormuz has made it impossible to deliver on the deal. The report said output fell further in April.
OPEC+ crude output averaged 33.19 million barrels per day in April, down 1.74 million barrels per day from March, the report said, citing secondary sources OPEC uses to monitor its production.
The April figure includes the United Arab Emirates (UAE), which left OPEC on May 1.