OPEC Reduces Oil Demand Forecast Again
OPEC cuts demand forecast again as the oil market starts looking past Hormuz, lowering its 2026 global oil demand growth estimate for the third consecutive month.
Revised demand outlook and production rebound
The monthly oil market report released Monday shows OPEC now expects demand growth this year to reach 780,000 barrels per day, a reduction of 190,000 bpd from the previous month’s projection. While the organization still anticipates higher consumption than many analysts, it raised its 2027 growth estimate by 210,000 bpd to 1.94 million bpd. The shift reflects a market that is less concerned about securing supplies and more focused on finding buyers.
June output rose by roughly 3 million barrels per day from May, bringing average production to 36.28 million bpd. The increase stems from Gulf producers restarting volumes that had been stranded during the Iran‑related conflict, not from new capacity. The reopening of the Strait of Hormuz allowed oil stored in tanks and on vessels to move again, easing a bottleneck that had limited shipments.
U.S. output remains near 14 million barrels per day. The United Arab Emirates, having left OPEC, reported a record 4.1 million bpd in June, routing more exports through Fujairah. Saudi Arabia, Kuwait, Iraq and Iran are also scaling production back up as shipping conditions improve.
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Supply outpacing demand and lingering risks
Even as supply recovers, demand growth continues to be trimmed. Every additional barrel enters a market where OPEC is steadily lowering its consumption expectations. The organization noted that easing geopolitical tensions could bolster economic growth in the second half of the year, provided energy markets and trade flows remain stable.
Nevertheless, shipping through the Strait of Hormuz stays well below pre‑war levels, insurance premiums remain high, and ongoing military strikes pose a threat to regional energy infrastructure. OPEC spent much of the year constrained by an effectively closed Hormuz, limiting its ability to meet production targets.
Looking ahead, the organization faces a paradox: it may soon be able to produce everything it wants, but the market may still want a little less.
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