OPEC Cuts Oil Demand 3rd Month in Row Amid Gulf Tensions

SECAUCUS, NJ (DTN) – OPEC downgraded its 2026 global oil demand growth forecast for a third consecutive month on Monday (7/13), citing renewed U.S.-Iran fighting that was once again straining oil shipments passing through the Strait of Hormuz.

Vienna-based OPEC, known in full as the Organization of the Petroleum Exporting Countries, said in its July monthly report that it was revising its 2026 demand growth projection downward by 190,000 bpd to 780,000 bpd. That would leave total estimated consumption at 105.94 million bpd, versus a prior 106.13 million.

The demand cuts were largely concentrated in Asia, with China’s consumption forecast trimmed by 110,000 bpd and India’s by 60,000 bpd. Conversely, the 12-member OPEC upgraded its 2027 global oil demand growth forecast by 210,000 bpd to 1.73 million bpd.

On the supply side, secondary sources indicated that overall crude production from OPEC+, an enlarged 23-member grouping that includes Mexico, rose by roughly 3 million bpd in June to average 36.28 million bpd.

Despite this broader alliance increase, leading exporter Saudi Arabia registered lower monthly output numbers compared to May.

The downgrade in OPEC demand outlook follows a rapid U.S.-Iran escalation over the weekend since the two sides called off last week a mid-June ceasefire agreement that came after roughly four months of war. Both have since claimed control over the Hormuz, with Tehran pronouncing the waterway closed and Washington insisting that tanker traffic was continuing through a U.S.-protected corridor on the chokepoint. Ship traffic data showed that flows this weekend fell to their lowest in five weeks. Observable crossings have almost completely ceased, while a handful of tankers attempted to traverse the chokepoint with transponders turned off. Prior to the war, the strait saw passage of about 20 million bpd of petroleum liquids.

Despite its demand cut, OPEC’s projections remain significantly more optimistic than rival forecasters tracking the impact of the four-month conflict. The International Energy Agency expects global demand to decline by 1 million bpd this year, while the U.S. Energy Information Administration projects a contraction of 1.2 million bpd.