OPEC lowers demand growth forecast, production falls more than 30%
Among them, oil production OPEC The cartel said in its latest monthly update on Wednesday that its membership fell further in April, falling more than 30% since the end of February when the Iran war began.
OPEC also lowered its demand growth forecast for 2026 to about 1.2 million barrels per day from about 1.4 million barrels per day previously. Global demand faces constraints as supplies from the Persian Gulf have been effectively cut off due to Iran’s blockade of the Strait of Hormuz.
OPEC’s production fell by 1.7 million barrels per day in April, after falling by 7.9 million barrels per day in March. In total, production among OPEC members fell by more than 30% during the war, or 9.7 million barrels per day.
OPEC’s update on Wednesday will likely be the last to include data from the United Arab Emirates, which left the cartel on May 1.
Total supply losses to Gulf oil producers now exceed one billion barrels, with more than 14 million barrels per day outages due to the closure of Hormuz. International Energy AgencyLast update published on Wednesday
Gulf oil production during the Iran war
| Gulf oil exporters | February | March | April | Lost from February to April | % change from February to April |
|---|---|---|---|---|---|
| Iranian | 3,241 | 3,065 | 2,854 | -387 | -12% |
| Iraq | 4,188 | 1,679 | 1,389 | -2,799 | -66% |
| Kuwait | 2,582 | 1,160 | 600 | -1.982 | -76% |
| Saudi Arabia | 10,112 | 7,726 | 6,768 | -3,344 | -33% |
| United Arab Emirates | 3,419 | 1,892 | 2,023 | -1.396 | -40% |
Source: OPEC produces thousands of barrels per day
Contrary to OPEC’s more positive outlook, the IEA predicts oil demand will fall by 420,000 barrels per day in 2026. The IEA is a Paris-based group of mostly Western countries working in coordination to ensure energy security.
The IEA said the real gap between supply and demand is much smaller because there is a surplus of oil in the market towards 2026. Producers and consumers also need to take action to reduce the loss, the group said.
Saudi Arabia and the UAE are diverting some exports to ports that bypass Hormuz, the IEA said. Manufacturers outside the Middle East, especially the USA, increased their exports to record levels in response to the crisis.
Government and commercial stocks also helped reduce losses, the IEA said. However, oil stocks are being depleted at a record pace due to the increased supply loss due to the closure of Hormuz. Stockpiles fell by 250 million barrels, or 4 million barrels per day, in March and April, according to the IEA.
The IEA said there will likely be more price volatility in the oil market as the peak summer demand period approaches.
