According to OPEC’s monthly report issued on Wednesday, the organization expects global demand for oil to grow by about 1.2 million barrels per day in 2026, compared to previous estimates of 1.4 million barrels per day, bringing the total expected demand to 106.3 million barrels per day.
Despite lowering expectations for the current year, OPEC raised demand growth estimates in 2027 to 1.5 million barrels per day, bringing total global demand to 107.9 million barrels per day.
The organization expects that most of the demand growth will come from outside the Organization for Economic Cooperation and Development countries, especially from Asia, China and India, as opposed to limited growth within advanced economies.
The report showed that the production of OPEC+ countries declined in April by about 1.74 million barrels per day on a monthly basis, to reach 33.19 million barrels per day, according to secondary sources relied upon by the organization.
This decline came after a sharp decline in March, when the coalition’s production reached about 34.93 million barrels per day at that time, compared to 42.77 million barrels per day in February, which means a loss of about 9.6 million barrels per day in just two months.
These declines come in light of the geopolitical tensions in the Gulf after the war with Iran, as about a fifth of the world’s oil supplies pass through the Strait of Hormuz. The closure of the strait led to continued disruption of crude flows, despite the declaration of a truce.
As for the production of OPEC countries alone, it decreased in April to 18.98 million barrels per day, compared to 20.71 million barrels per day in March.
Saudi Arabia recorded the largest monthly decline, as its production decreased by about 958 thousand barrels per day to 6.77 million barrels per day, which is the lowest since 1990. Kuwait’s production also decreased by about 561 thousand barrels per day to 600 thousand barrels per day, Iraq by 291 thousand barrels per day to 1.39 million barrels per day, and Iran by 211 thousand barrels per day to 2.85 million barrels per day.
On the other hand, the UAE’s production increased by about 131 thousand barrels per day to 2.02 million barrels per day, before its exit from “OPEC” as of the beginning of May.
The organization kept its expectations for the growth of non-OPEC+ oil supply in 2026 at 630,000 barrels per day, unchanged for the fourth month in a row, and 2027 expectations were fixed at 620,000 barrels per day.
The report data comes after the decision of a group of major OPEC+ countries, led by Saudi Arabia and Russia, to raise the target production levels in June by about 188 thousand barrels per day, in a move that Bloomberg described as a symbolic increase to show continued coordination within the alliance after the UAE’s exit from the organization.
However, the actual recovery of these barrels remains linked to the reopening of the Strait of Hormuz and the resumption of suspended production.
In the oil market, the report showed that the OPEC crude basket declined in April by about $7.57 to $108.79 per barrel, while the average of Brent crude reached $102.46 per barrel, and West Texas crude reached $98.67 per barrel.
The organization attributed the price volatility to the continued disturbances in oil flows in the Middle East, and the competition of refineries in Asia and Europe for available shipments, in exchange for a partial decline in the risk premium in the second half of the month.
The developments in the Strait of Hormuz remain the most prominent factor in the market, as the US Energy Information Administration said that the actual closure of the Strait pushed the average price of Brent to $117 per barrel in April, expecting prices to remain near $106 in May and June with the large withdrawal from global inventories. (Bloomberg)
