In its monthly oil market report released on Monday (July 13), the Organization of the Petroleum Exporting Countries (OPEC) lowered its 2026 global oil demand growth forecast for the third consecutive time, with the latest forecast at 780,000 barrels per day (bpd), a significant downward revision from 970,000 bpd in the June report. At the same time, OPEC raised its 2027 global oil demand growth forecast from 1.73 million bpd to 1.94 million bpd. The report also revealed that OPEC+ crude oil production (including former member UAE) averaged 36.28 million bpd in June 2026, a substantial increase of approximately 3 million bpd from May, mainly due to increased production from Gulf oil-producing countries. This set of data paints a complex picture of the global oil market characterized by "weak short-term demand, a recovering medium-term outlook, and rapid supply-side recovery," and provides the latest commentary on the divergent assessments of the energy landscape in the post-Iran war era by various institutions.

I. Demand Side: 2026 forecasts decline for the third consecutive year, 2027 outlook significantly revised upward.

The OPEC monthly report shows that global daily oil demand in 2026 will increase by 780,000 barrels compared to 2025, reaching 105.94 million barrels. This forecast is 190,000 barrels per day lower than the 970,000 barrels per day reported in June, and a cumulative decrease of 390,000 barrels per day from the 1.17 million barrels per day reported in May. This is the third consecutive time that OPEC has lowered its 2026 demand growth forecast, reflecting the organization's increasingly cautious assessment of the short-term momentum of global economic recovery and the pace of oil consumption recovery. The report points out that the expected increase in demand from both OECD and non-OECD countries has declined. The core reason for this downward revision is that global economic consumption of crude oil is lower than previously estimated. According to the latest forecast, global oil demand growth in 2026 is approximately 0.7%. 2027 Demand Forecast Significantly Raised by 210,000 Barrels Per Day In stark contrast to the continued downward revisions to the 2026 forecast, OPEC has significantly increased its 2027 global oil demand growth forecast from 1.73 million barrels per day to 1.94 million barrels per day. This upward revision of 210,000 barrels per day reflects OPEC's relatively optimistic outlook on the medium-term recovery of oil consumption. The report believes that with the stabilization of geopolitical situations and the gradual recovery of the global economy, oil demand will see a significant rebound in 2027.

II. Supply Side: Gulf oil-producing countries resumed production on a large scale, with output surging by 3 million barrels per day in June.

OPEC+ Production Returns Above 36 Million Barrels Per Day Production data disclosed in the report shows that OPEC+ crude oil production (including former member UAE) averaged 36.28 million barrels per day in June 2026, an increase of approximately 3 million barrels per day from 33.28 million barrels per day in May. This increase is considered aggressive, mainly due to the resumption of production by Gulf oil-producing countries, which was interrupted by the war with Iran. The UAE, as a former OPEC member, played a significant role in this increase. Reports indicate that Saudi Arabia's production in June was 6.637 million barrels per day. With the reopening of the Strait of Hormuz, previously forced production cuts are rapidly returning to the market. The dual pressures of supply recovery and weak demand: The 3 million barrels per day increase in June alone, coupled with OPEC's continuous downward revision of demand forecasts, signifies a profound shift in the global oil market's supply and demand dynamics. With demand growth of only 780,000 barrels per day, the 3 million barrels per day surge in supply in a single month has significantly widened the supply-demand gap, putting sustained downward pressure on international oil prices. The report also pointed out that international oil prices had fallen significantly in June due to factors such as market expectations of easing tensions in the Middle East and improved supply prospects.

III. Institutional Divergence: The Gap in Assessments Between OPEC and IEA Continues to Widen

OPEC Remains More Optimistic Than the IEA, but the Gap is Narrowing. OPEC and the IEA have significant differences in their assessments of global oil demand in 2026. The IEA, in its monthly report released on July 10, projected that global oil demand would decline by approximately 1 million barrels per day year-on-year in 2026, marking the first annual demand contraction since the COVID-19 pandemic in 2020. OPEC's latest forecast, however, projects an increase of 780,000 barrels per day—despite three consecutive downward revisions, a significant gap of nearly 1.8 million barrels per day remains. OPEC emphasized in its report that it still believes the impact of the Iran war on oil consumption is less than that of other forecasting agencies such as the IEA. However, with OPEC's continuous downward revisions and the IEA's narrowing of its July forecast of a 1 million barrel per day decline (from the previous 1.1 million barrel per day), the gap between the two agencies has narrowed marginally. 2027 Forecasts Converge On the 2027 outlook, the two institutions' assessments are converging. The IEA projects global oil demand will grow by approximately 2 million barrels per day in 2027, while OPEC's latest forecast is 1.94 million barrels per day. Both organizations largely agree on the medium-term demand recovery, with the main difference lying in their assessment of the 2026 transition period.

IV. Market Impact and Future Outlook

Short-term oil prices are under pressure, but a medium-term demand recovery is expected . The core contradiction revealed in the OPEC monthly report lies in the coexistence of weak short-term demand and expectations of a medium-term demand recovery, while the rapid recovery on the supply side is exacerbating the short-term supply-demand imbalance. The 3 million barrels per day increase in production in June alone, coupled with continued downward revisions to demand forecasts, means that the global oil market may face significant oversupply pressure in the third quarter. From the demand side, the IEA points out that after a year-on-year decrease of 4.8 million barrels per day in global oil demand in the second quarter of 2026, the decline narrowed to 1.7 million barrels per day in the third quarter, and is expected to turn to an increase of 1.2 million barrels per day in the fourth quarter. With the arrival of the summer travel peak and the decline in oil prices, global oil consumption is gradually recovering. This change in the pace of development this quarter may lay the foundation for a demand recovery in 2027. Geopolitics remains the biggest variable . It is worth noting that the OPEC monthly report's forecast adjustments are based on the assumption of a gradual normalization of the geopolitical situation. However, many uncertainties remain regarding the situation in the Middle East. Any new geopolitical conflict could disrupt the supply and demand balance, which means that there is considerable room for revision in current demand forecasts and production data.

Editor's Summary

OPEC's July monthly report exhibited a distinct "short-term bearish, long-term bullish" characteristic: the 2026 demand forecast saw its third consecutive decline, cumulatively lowered by 390,000 barrels per day to 780,000 barrels per day; while the 2027 outlook was significantly raised by 210,000 barrels per day to 1.94 million barrels per day. On the supply side, Gulf oil-producing countries increased production by 3 million barrels per day in June alone, pushing OPEC+ output back up to 36.28 million barrels per day. Short-term supply-demand imbalance pressures and medium-term demand recovery expectations are locked in a struggle, and OPEC and the IEA still have a significant difference of nearly 1.8 million barrels per day in their 2026 demand assessments. International oil prices have already seen a significant decline in June; future trends will depend on the race between the pace of demand recovery and the speed of supply recovery, as well as the evolution of the geopolitical situation.

Frequently Asked Questions

Q1: Why has OPEC lowered its 2026 oil demand forecast three times in a row? A: In its monthly reports for May, June, and July, OPEC lowered its 2026 global oil demand growth forecast from 1.17 million barrels per day to 970,000 barrels per day, and then further to 780,000 barrels per day. The main reasons for the downward revisions include: weaker-than-expected global economic recovery momentum, the continued impact of the Iran war on oil consumption, and a simultaneous decline in expected demand growth in both OECD and non-OECD countries. OPEC believes the actual impact is less than the IEA's assessment, but the continuous downward revisions themselves indicate that the short-term demand situation is indeed deteriorating. Q2: Why has OPEC simultaneously raised its 2027 demand forecast? A: OPEC raised its 2027 demand growth forecast from 1.73 million barrels per day to 1.94 million barrels per day, mainly based on its assessment of a medium-term global economic recovery and a rebound in oil consumption following the stabilization of the Middle East situation. This forecast is largely consistent with the IEA's expectation of a 2 million barrel per day increase in 2027, reflecting a consensus between the two institutions on the direction of medium-term demand recovery. Question 3: Why did OPEC+ production surge by 3 million barrels per day in June? Answer: OPEC+ crude oil production reached 36.28 million barrels per day in June 2026, an increase of approximately 3 million barrels per day compared to May. The main reason is that Gulf oil-producing countries began a large-scale restoration of production capacity interrupted by the Iran-Iraq War after the resumption of navigation in the Strait of Hormuz. The UAE, as a former member country, also played a significant role in this production recovery. Question 4: How large is the difference between OPEC and IEA's forecasts for oil demand in 2026? Answer: The IEA expects global oil demand to decline by approximately 1 million barrels per day in 2026, while OPEC's latest forecast is an increase of 780,000 barrels per day, a difference of approximately 1.78 million barrels per day. Despite OPEC's three consecutive downward revisions and the IEA's upward revision in its July report (from a decrease of 1.1 million barrels per day to a decrease of 1 million barrels per day), significant differences remain. OPEC believes the impact of the war on consumption is less than the IEA's assessment. Question 5: What do these forecast adjustments mean for international oil prices? Answer: The 3 million barrels per day increase in production in June, coupled with continued downward revisions to demand forecasts, indicates a worsening short-term supply-demand imbalance, putting downward pressure on oil prices. The report has already pointed out a significant decline in international oil prices in June. However, IEA data shows that demand is improving quarterly—the decline narrowed to 1.7 million barrels per day in the third quarter, and is expected to turn to growth in the fourth quarter—if this trend continues, a demand recovery in 2027 is expected. Geopolitics remains the biggest variable.