The Organisation of Petroleum Exporting Countries (OPEC)  reduced its forecast for global oil demand growth in 2026, citing the impact of the ongoing war in Iran, which has effectively closed the Strait of Hormuz, a critical global oil transit route, Reuters reported. The closure has curtailed millions of barrels of Middle East supply, driving fuel prices higher and prompting governments to adopt conservation measures.

The group now expects world oil demand to expand by 1.17 million barrels per day (mmbbl/d) in 2026, compared with its earlier projection of 1.38 mmbbl/d .According to OPEC’s latest monthly report, global oil demand is set to average 104.57 million bpd in the second quarter (Q2) of 2026, compared with 105.07 mmbbl/d projected last month. The previous report had already trimmed the estimate by 500,000 barrels per day (b/d).

By contrast, the International Energy Agency (IEA) projected a sharper decline in consumption this year as   Middle East conflict drains inventories at an unprecedented pace.

As for 2027, OPEC anticipates a rebound in demand and has raised its 2027 growth forecast to 1.54 million bpd, an increase of 200,000 bpd from its prior outlook.

OPEC+, which brings together OPEC members and partners including Russia, had planned to resume output hikes from April, but the closure of the Strait of Hormuz derailed the agreement.

Average OPEC+ crude output stood at 33.19 million barrels per day in April, down 1.74 million bpd from March, based on secondary sources used by OPEC to track supply. The April tally also includes the United Arab Emirates, which exited OPEC on May 1.