The Organization of the Petroleum Exporting Countries lowered its 2026 oil‑demand growth forecast to 970,000 barrels a day, down from a previous estimate of 1.17 million barrels a day, the group said in its monthly report, as reported by The Wall Street Journal. The cartel cited the U.S. naval blockade on Iran and the near‑closure of the Strait of Hormuz, a chokepoint through which a fifth of the world’s oil used to transit, as the primary factors curbing output from major Gulf producers.
Production from OPEC member states fell by 177,000 barrels a day in May to 18.83 million barrels a day, according to the report. Output from the broader OPEC+ alliance declined by 185,000 barrels a day to 33.13 million barrels a day. Iran suffered the steepest drop, with production falling by 546,000 barrels a day as the U.S. blockade effectively blocked shipping in and out of the country’s ports. The data still includes the United Arab Emirates, which left the organization at the beginning of May.
For 2027, OPEC projected demand growth of 1.73 million barrels a day, up from a prior estimate of 1.54 million.
OPEC’s demand forecast stands in sharp contrast to those of other major forecasters. The U.S. Energy Information Administration expects global oil demand to decline by 1.1 million barrels a day in 2026, while the International Energy Agency projects a contraction of 420,000 barrels a day. The gap reflects differing assessments of how deeply the Iran crisis and the Hormuz closure will affect consumption.
Despite the ongoing supply disruption, crude oil prices have remained well below the peaks reached in March, when Brent briefly topped $100 a barrel after the onset of hostilities. On Thursday afternoon in European trading, Brent crude was just below $92 a barrel and West Texas Intermediate hovered near $89 a barrel. Traders attributed the relative stability to several mitigating factors: the release of emergency oil reserves from strategic stockpiles, softer global demand, lower crude imports from China, stronger U.S. exports, and pipeline rerouting that allowed Saudi Arabia and the UAE to bypass the Hormuz chokepoint. Supply from producers outside the wider OPEC+ group is still expected to rise by 630,000 barrels a day this year and 620,000 barrels a day in 2027, OPEC said.
Tensions in the region remain elevated despite a ceasefire struck two months ago. The U.S. and Iran exchanged fire again over the past week. President Trump is pursuing a memorandum of understanding to gradually reopen the Strait of Hormuz, but talks remain stalled over Tehran’s nuclear program and the extent of financial relief. OPEC and its allies, in a move widely seen as symbolic, agreed to raise output again in July, even with much of the cartel’s production capacity blocked by the Hormuz closure.