OPEC has trimmed its 2026 global oil demand growth forecast for the third straight month, even as crude production rebounds across the Gulf and tanker traffic slowly returns to the Strait of Hormuz.
In its monthly oil market report released Monday, OPEC lowered expected oil demand growth this year to 780,000 barrels per day, down another 190,000 bpd from last month's forecast. The producer group still expects stronger consumption than many other forecasters, including the International Energy Agency, and even raised its demand growth estimate for 2027 by 210,000 bpd to 1.94 million bpd.
The downgrade reflects a market that's becoming less worried about finding oil than finding customers for it.
OPEC+’s June output climbed roughly 3 million barrels per day from May to average 36.28 million bpd as Gulf producers restarted volumes that had been stranded during the Iran war. Those barrels weren’t the result of new capacity. They were courtesy of the Strait of Hormuz reopening enough to move oil that had been sitting in storage, on tankers, and behind export bottlenecks.
And while supply hasn’t returned full force, it is recovering faster than demand.
The United States is producing nearly 14 million barrels per day. The UAE, fresh off its departure from OPEC, pumped a record 4.1 million bpd in June while ramping up exports through Fujairah. Saudi Arabia, Kuwait, Iraq, and Iran are all bringing production back online as shipping conditions improve. Every additional barrel enters a market where OPEC is steadily lowering its expectations for consumption.
OPEC still sees room for optimism. The group said easing geopolitical tensions could strengthen economic growth during the second half of the year if energy markets and trade flows continue to stabilize.
Still, shipping through Hormuz remains well below pre-war levels, insurance costs remain elevated, and fresh military strikes continue to threaten energy infrastructure across the region.
OPEC spent much of this year unable to produce what it wanted because Hormuz was effectively closed. The group's next problem may come from producing everything it wants in a market that wants a little less.
By Julianne Geiger for Oilprice.com
