Global oil demand growth of 0.8 million barrels per day in 2026

OPEC cut its forecast for global oil demand growth in 2026 to 780,000 barrels per day, according to a copy of its latest monthly report, marking the third consecutive downward revision. The organization still expects a smaller impact on consumption since the start of the Iran war compared with forecasts from other entities such as the International Energy Agency. OPEC indicated that the global economy could see improvement during the remainder of the year and raised its oil demand growth forecast for 2027.

The war led to the closure of the Strait of Hormuz, one of the world's most important oil passages, for several months, causing oil production in the Middle East to drop by millions of barrels. Production began to recover after the interim peace agreement between Iran and the United States, but renewed military strikes have raised concerns about shipments.

OPEC affirmed that "the dynamics of global economic growth in the first half of 2026 remained generally strong." It added: "Any potential easing of geopolitical tensions could contribute to boosting global growth in the second half of 2026, provided energy markets and trade flows stabilize further."

The current forecast cut oil demand growth for this year from 970,000 barrels per day in the previous forecast. OPEC expects oil demand to rise in 2027 by 1.94 million barrels per day, an increase of 210,000 barrels per day from the previous forecast.

OPEC+, which includes the Organization of the Petroleum Exporting Countries (OPEC) and allies such as Russia, had agreed to resume output increases starting in April, but the closure of the Strait of Hormuz prevented production from rising to agreed quota levels.

Average crude oil production from OPEC+ countries rose to 36.28 million barrels per day in June, an increase of nearly 3 million barrels per day from May, according to the report, which relied on secondary sources used by OPEC to monitor its production, as Gulf countries began resuming output halted due to the war with Iran. The May figure includes the UAE, which withdrew from OPEC and OPEC+ on May 1.

In demand details, global oil demand is expected to grow at a healthy rate of 0.8 million barrels per day in 2026 year-on-year, after a slight downward revision from last month's assessment. Demand in OECD countries is expected to grow by about 40,000 barrels per day, while demand in non-OECD countries is expected to grow by about 0.74 million barrels per day.

For 2027, global oil demand is expected to grow by about 1.9 million barrels per day year-on-year, after an upward revision from last month's assessment. Demand in OECD countries is expected to grow by about 0.3 million barrels per day, while demand in non-OECD countries is expected to grow by about 1.7 million barrels per day.

In global oil supply details, liquids production from non-OPEC+ countries is expected to grow by about 0.6 million barrels per day year-on-year in 2026, unchanged from last month's assessment. Brazil, the United States, Canada, and Argentina are expected to be the main drivers of liquids production growth.

For 2027, liquids production from non-OPEC+ countries is also expected to grow by about 0.6 million barrels per day, the same figure as estimated last month. This growth will be driven mainly by Qatar, Canada, Brazil, and Argentina, and production of natural gas liquids and non-conventional liquids from non-OPEC+ countries is expected to rise by about 0.1 million barrels per day year-on-year, averaging 8.8 million barrels per day in 2026. An additional growth of about 0.1 million barrels per day year-on-year is expected in 2027, averaging about 8.9 million barrels per day.

In commercial inventories, preliminary data show that OECD commercial oil stocks fell by 21.8 million barrels month-on-month to 2,770 million barrels. At this level, OECD commercial stocks were 31.4 million barrels lower year-on-year, 48.6 million barrels below the latest five-year average, and 185.8 million barrels below the 2015-2019 average.

Regarding oil components, crude oil stocks fell by 6.9 million barrels, while product stocks fell by 15 million barrels month-on-month. OECD commercial crude oil stocks stood at 1,364 million barrels, up 4.3 million barrels year-on-year, 10.9 million barrels below the latest five-year average, and 121.6 million barrels below the 2015-2019 average.

Total OECD product stocks stood at 1,406 million barrels in May. This figure was down 35.6 million barrels year-on-year, 37.7 million barrels below the latest five-year average, and 64.2 million barrels below the 2015-2019 average. In terms of forward cover days, OECD commercial stocks fell by 1.3 days month-on-month in May to 59.8 days. This was 0.5 days lower year-on-year, 1.3 days below the latest five-year average, and 2.2 days below the 2015-2019 average.

Regarding supply-demand balance, the forecast for demand for OPEC+ crude in 2026 was revised down by 0.2 million barrels per day from last month's estimates to 42.3 million barrels per day, the same level as 2025. The demand for OPEC+ crude oil for 2027 remained unchanged from last month's estimates at 43.6 million barrels per day, an increase of about 1.2 million barrels per day from the 2026 forecast.