OPEC cuts 2026 oil demand forecast for fourth straight month

OPEC on Wednesday lowered its forecast for global oil demand growth in 2026 to 580,000 barrels per day, down from 780,000 bpd, marking the fourth consecutive downward revision as stalled negotiations over the Strait of Hormuz continue to weigh on the outlook for global energy markets.marketscreener+1

The revision, published in the organization's August monthly report, comes the same day the International Energy Agency issued an even more bearish assessment, projecting global oil demand will decline by 1.6 million bpd this year — a 510,000 bpd larger drop than its previous estimate — as elevated fuel prices put further downward pressure on consumption.fxstreet

Diverging Outlooks

OPEC and the IEA remain far apart in their assessments. While OPEC still expects modest demand growth in 2026, the IEA forecasts an outright contraction, reflecting the broader disruption caused by the ongoing conflict between the United States and Iran. The IEA said global oil supply is now expected to fall by an average of 4.3 million bpd to around 102 million bpd, though it projects supply rebounding by 8.3 million bpd next year to 110.3 million bpd as the agency assumes the Strait of Hormuz will reopen.fxstreet

OPEC, for its part, raised its forecast for 2027 demand growth to 2.16 million bpd, up from 1.94 million bpd, signaling confidence that consumption will recover once shipping routes normalize.wsj+1

Hormuz Impasse

The downward revisions are driven largely by the failure to reach an agreement on reopening the Strait of Hormuz, through which roughly a fifth of the world's oil passes. According to the Wall Street Journal News Corp ↗ 0.77%, halted negotiations to reestablish access to the waterway and ongoing risks in the Red Sea are extending interruptions in worldwide supply chains.wsj

The IEA warned that "previously available inventory buffers are rapidly depleting" and that "the urgency of reopening the Strait has increased." Oil prices have risen sharply in recent weeks, with Brent crude up more than 13% over the past five trading days.marketscreener+1

What Comes Next

The IEA expects demand to contract through the middle of the year before returning to growth of 580,000 bpd in the final quarter, projecting the market will move back into surplus toward year-end — though it cautioned that "risks remain substantial." Observers are watching indirect U.S.-Iran contacts and Pakistan's assertion that a deal is near, even as both Washington and Tehran have hardened their negotiating positions.marketscreener+1