OPEP raises 2026 demand forecast, trims rival supply growth

OPEP Projects Stronger Global Oil Demand, Signals Tighter Market Conditions

Key Forecasts:

• Global oil demand will rise by 1.38 million barrels per day (bpd) in 2026, a 100,000‑bpd bump from the previous estimate.
• The agency’s 2026 outlook lies at the upper end of industry ranges, reflecting a slower energy‑transition pace than rivals such as the International Energy Agency (IEA), which projects a 700,000‑bpd increase this year.
• For 2025, OPEP lifts its global economic growth estimate to 3%, citing new trade agreements under President Donald Trump and robust performance in India, China, and Brazil.
• US shale output will decline by 100,000 bpd in 2026, reversing the month‑prior expectation of no year‑over‑year change.
• Non‑OPEP+ supply is projected to grow by 630,000 bpd in 2026, below the prior forecast of 730,000 bpd.

Shift in OPEP+ Production Strategy

After years of supply‑cutting support, the OPEP+ group is now shifting toward increased production to regain market share. This change is partly driven by the need to absorb US shale output, which has become less profitable amid falling oil prices, heightened US tariff concerns, and broader geopolitical risks.

US Shale Output Outlook

• OPEP now expects US shale output to fall by 100,000 bpd in 2026.
• During 2025, the agency anticipates a total US oil production increase of about 130,000 bpd next year, compared to the January projection of 510,000 bpd.

July 2025 Production Snapshot

• In July, the OPEP+ group increased crude output by 335,000 bpd.
• This figure sits slightly below the group’s July quota increase of 411,000 bpd.

Implications for Market Dynamics

By projecting higher global demand and a tighter supply growth profile for non‑OPEP+ producers, the organization supports its plan to boost production volumes and reclaim market share after a prolonged period of cuts. The revised forecasts also underscore a more resilient global economy, even amid persistent US trade tensions and widespread geopolitical uncertainties.