OPEC cuts oil demand forecast for 2026 as Middle East conflict continues

(Sharecast News) - The Organization of the Petroleum Exporting Countries has cut its oil demand growth projection this year but raised its outlook for next year as it continues to assess the impact of a months-long near closure of the key Strait of Hormuz.

In its monthly report on Wednesday, OPEC predicted that oil demand would grow by just 1.17m barrels of a day worldwide in 2026, down from an earlier forecast of 1.38m barrels.

Next year's growth projection, however, has been raised to 1.54m barrels, from 1.34m barrels previously.

The intergovernmental cartel said its global economic growth forecasts for 2026 were unchanged from last year, predicting that worldwide GDP would expand 3.1% this year, picking up to 3.2% in 2027.

However, national projections for growth in the eurozone and Japan were revised lower, to 1.1% and 0.8% respectively, while China is set to grow 4.6%, more than previously expected.

"The global economic growth momentum has remained relatively resilient in recent months. The global economic growth continues to be supported by global investment in AI, the boost to international trade, as well as fiscal measures in the key economies," OPEC said.

"The US, China, India and other Asian economies have been the most supportive drivers of growth since the turn of the year."

The organisation called the current geopolitical conflict in the Middle East - along with its related trade challenges - a "temporary" event which the global economy should be resilient enough to absorb.

OPEC crude production averaged 18.98m barrels a day in April, down 1.73m barrels from the month before, while non-OPEC output was more or less flat at 14.21m barrels. However, April's data includes a contribution from the UAE, which abruptly quit the OPEC group at the start of May.