Published On 11/6/2026
The Organization of Petroleum Exporting Countries (OPEC) reduced its forecast for growth in global oil demand in 2026 to 970,000 barrels per day, in the second downward revision in a row, with the continued impact of the US-Israeli war on Iran on energy supplies and shipping movement through the Strait of Hormuz.
OPEC said in its monthly report that its new expectations are lower than its previous estimate of 1.17 million barrels per day, but it maintained a more optimistic vision from the US Energy Information Administration and the International Energy Agency, which expect a decline in demand for oil this year due to the war.
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OPEC raised its forecast for global oil demand growth in 2027 to 1.73 million barrels per day, an increase of 190,000 barrels per day from previous estimates, and said that consumption may improve at a later time despite the current supply disruptions.
The organization said in its report that “global economic performance remains strong in the first half of 2026 despite the continuing geopolitical tension,” and kept its expectations for economic growth unchanged.
Brent crude fell by 0.42% to record $92.71 per barrel at the time of writing these lines, while US West Texas Intermediate crude rose by 0.14% to record $90.16, with investors assessing the impact of the escalation in the Middle East on supplies and demand.
Hormuz and supplies
The war made the Strait of Hormuz, one of the most important oil corridors in the world, closed, affecting millions of barrels of Middle Eastern production, and raising fuel costs for consumers and companies globally.
Yesterday, Iran announced the closure of the Strait of Hormuz to oil tankers and commercial ships, and said that any ship that attempts to pass will be exposed to fire, while the US military said that commercial ships continue to pass through the Strait, and denied that any American warships were being targeted there.
Reuters quoted Sujin Kim, an analyst at MUFG, as saying that the escalation adds more uncertainty to the fragile ceasefire negotiations, and threatens to continue the supply interruption that has hampered global exports of crude oil, fuel, and liquefied natural gas since the start of the conflict.
In this context, Reuters quoted three Iranian sources and an unnamed European official as saying that the United States and Iran are exchanging letters regarding the details of a memorandum of understanding after reaching a political understanding, but some issues still require detailed discussion, including the mechanism for releasing billions of dollars of frozen Iranian funds.
Weak Chinese demand for fuel limits the war-driven rise in oil prices, as data indicates a decline in gasoline and diesel consumption, in addition to a decline in crude imports.
OPEC Plus production
The OPEC Plus alliance, which includes OPEC and allies including Russia, agreed to resume increasing production starting in April, but the closure of the Strait of Hormuz makes implementing the increase impossible in light of the disruption of shipping traffic and the decline in exports of some producers.
The OPEC report, based on secondary sources that the organization uses to monitor its production, showed that the average OPEC Plus crude production reached 33.13 million barrels per day in May, a decrease of 190 thousand barrels per day from April.
Iran recorded the largest decline in production, while oil tanker tracking data indicated a sharp decline in its exports in May due to the US blockade.
The May figure included production from the UAE, which withdrew from OPEC and OPEC Plus on the first of the same month.
Data from the US Energy Information Administration showed that crude inventories in the United States fell by 7.2 million barrels to 426.5 million barrels in the week ending June 5, compared to analysts’ expectations in a Reuters poll of a decline of 4 million barrels.
Indian refiners said they had obtained enough crude oil to meet their needs until at least August, despite India’s announcement that a ship had been attacked off the port of Shinas in Oman in an incident that was the third of its kind this week, according to Reuters.
