KEY POINTS
- OPEC cut its 2026 oil demand growth forecast to 600,000 bpd from 800,000 bpd.
- Weaker expected demand in China, India and other Asian markets drove the revision.
- OPEC raised its 2027 forecast to 2.2 million bpd, citing stronger demand prospects in Asia and Europe.
The Organisation of the Petroleum Exporting Countries, OPEC, has lowered its forecast for global oil demand growth in 2026, citing weaker expected consumption across key Asian markets.
In its latest monthly oil market report released on Wednesday, OPEC projected that global oil demand will increase by 600,000 barrels per day (bpd) in 2026 compared with 2025.
The new estimate represents a reduction from the 800,000 bpd growth forecast contained in OPEC’s July report.
OPEC said the downward revision was largely driven by expectations of weaker oil demand growth in Asia.
The organisation expects China, India and other Asian markets to record slower year-on-year growth in oil consumption during 2026 than previously anticipated.
The broader Asia-Pacific region is also expected to experience a sharper decline in oil demand this year, contributing significantly to the revision of OPEC’s global outlook.
The adjustment highlights the importance of Asian economies to the global oil market, as the region accounts for a substantial share of worldwide energy consumption.
OPEC More Optimistic About 2027
While OPEC reduced its 2026 forecast, it raised its projection for global oil demand growth in 2027.
The organisation now expects global oil demand to rise by approximately 2.2 million bpd year-on-year in 2027, up from its previous estimate of 1.9 million bpd.
OPEC attributed the stronger 2027 outlook mainly to expectations of improved demand across Asia-related markets.
China, India, other Asian economies and the Asia-Pacific region are all expected to record stronger oil demand growth in 2027 compared with 2026.
OPEC’s more optimistic outlook for 2027 is not limited to Asia.
The report also projects stronger year-on-year oil demand growth in Europe, suggesting that consumption in the region could contribute to the broader recovery in global demand.
The contrasting forecasts for 2026 and 2027 indicate that OPEC expects relatively subdued demand growth in the near term, followed by a stronger expansion in global oil consumption the following year.
The reduction in OPEC’s 2026 demand forecast could influence expectations about global oil market conditions, particularly as producers and traders assess the balance between supply and consumption.
A weaker demand outlook can increase concerns about potential oversupply if production remains high, while stronger expectations for 2027 could provide a more positive outlook for the market over the longer term.
