The Organization of the Petroleum Exporting Countries (OPEC) has once again revised downward its forecast for global oil demand growth in 2026, citing ongoing impacts from geopolitical disruptions, particularly the Iran-related conflict and disruptions in the Strait of Hormuz.
According to OPEC’s latest Monthly Oil Market Report (MOMR) released on July 13, 2026, world oil demand is now projected to grow by just 780,000 barrels per day (bpd) in 2026, a reduction of approximately 190,000 bpd from the previous month’s estimate of 970,000 bpd. This marks the third consecutive downward revision.
The bulk of the growth is expected to come from non-OECD countries (around 740,000 bpd), while OECD demand is seen rising modestly by about 40,000 bpd.
The revisions reflect the lingering effects of the Iran war, which effectively closed the Strait of Hormuz for months, disrupting millions of barrels of Middle East oil supply and trade flows. Although output is beginning to recover following interim peace efforts between Iran and the US, renewed military concerns continue to weigh on market stability.
OPEC noted that global economic growth in the first half of 2026 has remained “broadly resilient,” but potential moderations in geopolitical tensions could provide upside for growth in the second half if energy markets and trade flows stabilize further.
For comparison, other forecasters like the International Energy Agency (IEA) have painted a more cautious picture amid the disruptions, with some projecting contractions in demand for 2026.
Outlook for 2027 and Broader Market
OPEC raised its forecast for 2027 oil demand growth to about 1.94 million bpd (up 210,000 bpd from the previous estimate), signaling expectations of a stronger rebound as conditions normalize.
On the supply side, OPEC+ crude output averaged 36.28 million bpd in June, up about 3 million bpd from May, as Gulf producers resumed halted production.
Implications for India and Global South
For major importers like India, the tempered demand growth outlook could translate into relatively softer oil prices in the near term, providing some relief amid economic pressures. However, volatility remains high due to ongoing geopolitical risks in the Middle East, which could spike prices if tensions escalate again. India’s demand growth was among areas trimmed in recent revisions.
This development comes as India continues to navigate energy security challenges, balancing imports with domestic production and renewable transitions.
