OPEC Cuts Its 2026 Oil Demand Forecast for a Fifth Straight Month
The group now sees demand growth of just 380,000 barrels a day this year but is more upbeat on 2027, days after its core members froze October output.
OPEC has lowered its forecast for growth in world oil demand in 2026 for the fifth consecutive month. In its monthly oil market report, released on 10 September, the producer group said it now expects global consumption to rise by about 380,000 barrels a day this year, a fraction of the growth it had pencilled in earlier in the year.
At the same time, OPEC raised its projection for 2027, signalling that it expects a strong rebound in consumption once high prices and supply disruptions ease.
Context: a forecast chasing a moving target
The downgrades have tracked the course of the conflict involving Iran and the disruption to shipping around the Strait of Hormuz. In July, after three successive cuts, OPEC was still expecting 2026 demand to grow by 780,000 barrels a day. By August the figure had slipped to around 600,000. The September estimate is roughly half of July's.
Even so, OPEC's numbers remain well above those of the International Energy Agency, which advises consuming countries. The IEA has forecast that global oil demand will actually shrink in 2026, which would be the first annual decline since the pandemic year of 2020, as high prices and shortages force consumers to cut back.
OPEC+ holds the line
The report follows a virtual meeting on 6 September at which seven core members of the wider OPEC+ alliance, namely Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman, agreed to keep their October production targets at September's levels. That decision came after the group had finished unwinding a voluntary cut of 1.65 million barrels a day.
In practice, the targets matter less than usual. Many members are unable to raise output to their allotted quotas because of operational constraints and restricted export routes. Jorge Leon of Rystad Energy summed up the position: "OPEC+ currently has very limited power over the physical oil market."
Stocks are tight regardless. Commercial oil inventories in the industrialised OECD countries fell by 26.4 million barrels in June to 2.73 billion barrels, leaving them about 66.5 million barrels below their five-year average.
Why it matters
Demand forecasts shape how producers, traders and governments plan. A lower estimate for this year combined with a higher one for next implies that OPEC sees today's weakness as a temporary response to price and disruption rather than a lasting change in behaviour.
If that reading is right, the market could tighten again in 2027 just as Gulf production is recovering, which would support prices. If the IEA's more pessimistic view proves closer to the mark, some of the demand lost this year, particularly where drivers and fleets have switched to electric vehicles, may not return at all. The gap between the two agencies is therefore more than a statistical quarrel: it is a disagreement about how permanent this year's shock will be.
- 2026 demand growth: cut to about 380,000 barrels a day, the fifth downgrade in a row.
- 2027 demand growth: revised upwards from the roughly 2.2 million barrels a day OPEC projected last month.
- IEA view: global demand expected to contract in 2026.
- Supply policy: core OPEC+ members kept October output targets unchanged on 6 September.
- Inventories: OECD commercial stocks sat 66.5 million barrels below the five-year average in June.
Outlook
The core OPEC+ group meets again on 4 October. With Brent back above $100 a barrel this week, pressure from consuming countries for more supply is likely to grow, but the group's ability to respond is constrained by the same export bottlenecks that are driving prices up.
Until Gulf shipping routes function normally again, OPEC's influence on the market is likely to be felt more through its forecasts than through its quotas.
Image: Sgroey via Wikimedia Commons, CC BY-SA 4.0