The latest revision comes as oil markets continue to deal with disruptions linked to the conflict involving Iran and restrictions on shipping through the Strait of Hormuz and other regional routes. OPEC’s latest outlook remains considerably more positive on oil consumption than that of the International Energy Agency, which on the same day forecast a 1.6 million b/d decline in global oil demand for 2026.
Fourth consecutive cut to 2026 forecast
OPEC’s new estimate of 580,000 b/d represents a reduction of 200,000 b/d, or about 26%, from its previous forecast of 780,000 b/d. The July report had already lowered the 2026 demand-growth estimate from 970,000 b/d to 780,000 b/d, following an earlier cut from 1.17 million b/d to 970,000 b/d in June.
The sequence means OPEC has now reduced its 2026 demand-growth forecast four times.
Despite the repeated downward revisions, OPEC continues to forecast growth rather than a contraction in global oil consumption this year. That puts its outlook significantly above the IEA’s latest projection of a 1.6 million b/d decline.
The difference between the two agencies’ forecasts is now 2.18 million b/d.
OPEC raises its 2027 outlook
While cutting its 2026 estimate, OPEC raised its forecast for global oil-demand growth in 2027 to 2.16 million b/d, from 1.94 million b/d previously. That is an increase of 220,000 b/d, or roughly 11%.
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The revision means OPEC expects oil consumption to expand more rapidly next year than it had previously anticipated, despite the weaker growth outlook for 2026.
The IEA also expects oil demand to return to growth in 2027, although its forecast is different from OPEC’s. The agency currently projects growth of about 2.4 million b/d next year after its expected contraction in 2026.
OPEC production jumps in July
The August report also recorded a sharp increase in crude production by OPEC members.
OPEC members produced 23.63 million b/d in July, an increase of 1.66 million b/d from June, according to the report. The largest increases came from Kuwait, Iraq and Saudi Arabia.
The July figure still includes production from the United Arab Emirates, even though the UAE left OPEC at the beginning of May.
Production from the broader OPEC+ group also increased in July, rising by about 1.42 million b/d to 37.65 million b/d.
The increase came as Gulf producers were able to raise output following a temporary easing in the conflict and improved production conditions. OPEC+ has also been progressively restoring barrels that had previously been withheld under its production agreements.
Oil prices remain under pressure from supply disruptions
The production increase comes against a market still affected by disruptions to oil transportation.
The Strait of Hormuz remains a major concern for the oil market because it is a key export route for crude from Gulf producers. Reuters reported on Aug. 12 that stalled talks over reopening the waterway, combined with renewed attacks on shipping routes, were continuing to support oil prices.
Brent crude was trading at around $89 a barrel on Aug. 12, while U.S. West Texas Intermediate was above $83 a barrel, according to the same report.
The OPEC Reference Basket had also risen sharply during the conflict before falling back as market conditions changed. The basket averaged about $82.44 a barrel in July, compared with $89.55 in June, according to available July price data.
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The July average nevertheless remained well above the levels recorded earlier in the year. The OPEC basket averaged $62.43 a barrel in January, $67.90 in February and $116.37 in March, before declining to $108.34 in April, $112.32 in May, $89.55 in June and $82.44 in July.
OPEC and IEA diverge sharply on demand
The latest OPEC forecast further widens the gap between the two major oil-market forecasting organizations.
OPEC expects global oil demand to continue increasing in 2026, albeit at a much slower pace than it previously projected. The IEA, by contrast, expects demand to fall by 1.6 million b/d this year, citing the effects of high oil prices and continuing uncertainty surrounding the conflict and supply disruptions.
The IEA also expects global oil supply to fall by 4.3 million b/d in 2026, to 102.02 million b/d, according to its August report. That would leave the market with a projected supply deficit of about 1.27 million b/d against demand.
OPEC’s latest demand projection therefore presents a markedly different assessment of how the conflict and resulting disruptions are affecting consumption.
