OPEC Sees Steady 2026 Demand, Q2 Dip Over Iran War

SECAUCUS, NJ (DTN) – OPEC reported Monday (4/13) that it expected global oil demand growth to remain steady at 1.4 million bpd for 2026, though the group revised its second-quarter forecast lower by 500,000 bpd due to “transitory weakness” from Middle East developments.

Global oil demand is now projected to average 105.07 million bpd in the second quarter, down from the 105.57 million bpd forecast last month. This quarterly dip is expected to be offset by stronger demand in the second half of the year, driven by non-OECD regions like China and India.

The April report highlighted significant production shifts, with total crude output from countries participating in the Declaration of Cooperation (DoC) dropping by 7.7 million bpd in March to average 35.06 million bpd. Saudi Arabia’s production fell to 7.8 million bpd in March, a sharp month-on-month decrease of 2.314 million bpd according to secondary sources.

Despite production declines, Venezuelan output saw a recovery, increasing by 79,000 bpd in March to reach 988,000 bpd. Meanwhile, global refinery intakes fell to 77.1 million bpd in March, the largest monthly decline since April 2020, primarily due to cut off crude flows from the Persian Gulf to Asia.

On the U.S. Gulf Coast, refining margins surged as middle distillate crack spreads reached multi-year highs. USGC gasoline crack spreads against WTI rose by $13.29 bbl in March to average $41.16 bbl, supported by tight supplies and healthy exports.

U.S. refinery processing rates increased by 380,000 bpd in March to average 16.5 million bpd as facilities returned from maintenance. This rise occurred even as trade disruptions pushed dirty tanker spot freight rates to record levels, with Suezmax rates on the USGC-to-Europe route jumping 104%.

OPEC maintained its global economic growth forecast at 3.1% for 2026. While the report noted that geopolitical tensions have disrupted trade and tourism in the Middle East, it emphasized that physical market fundamentals remain firm.