OPEC Sees Tighter Oil Outlook Next Year As Demand Accelerates

Opec forecast a tighter global oil market than previously projected, citing accelerating demand growth and a slower expansion in rival supplies.

The Organisation of the Petroleum Exporting Countries raised estimates for world demand growth in 2026 by 100,000 barrels a day to 1.4mn a day, a fractionally higher rate than this year, on stronger economic expectations. It trimmed forecasts for supply growth outside the group by the same amount.

The data from Opec’s Vienna-based secretariat suggest oil inventories around the world will deplete significantly next year — by almost 1.2mn barrels a day — unless the group and its allies revive more of the production they still have halted.

Yet the group’s outlook has proved excessively bullish in recent years and remains considerably more upbeat than that of the wider industry. Last year, Opec was ultimately forced to slash demand projections by 32% over the course of six monthly downgrades.

Recent policy indicates that group leader Saudi Arabia does share some of the secretariat’s optimism. With a decision earlier this month, the kingdom and its partners have fully fast-tracked the restart of 2.2mn barrels a day, one year ahead of schedule.

Oil prices have weakened during this accelerated supply revival, which has come as US President Donald Trump’s trade war darkens the economic outlook. Crude is down 11% for the year at about $66 a barrel in London. Opec and its partners have signalled their next move could be anything from another increase to a pause or a cutback.

In terms of oil supply from the alliance and its allies, Opec’s monthly report published on Tuesday showed a mixed picture, adding to the confusion sowed by a data change introduced last month.

It said crude production from the 22 Opec+ members increased by 335,000 barrels a day in July, with about half of the gain accounted for by Saudi Arabia.

However, for the second consecutive month, the data appeared to present a “supply-to-market” figure from the kingdom — which excludes movements to and from stockpiles — rather than the more traditional measure, production itself.

While the report showed that Saudi supply-to-market rose by 165,000 barrels a day last month to 9.525mn a day, it added in a footnote that the kingdom notified Opec it reduced actual production by 551,000 barrels to 9.2mn barrels.

Riyadh said last month it ramped up output in June to safely position barrels during the Israel-Iran conflict, without selling the additional supplies to customers.

Several of the companies that assess output on Opec’s behalf said they were asked to report supply-to-market numbers for June, which were lower than their production estimates and thus showed the kingdom complying with its Opec+ quota.

Opec didn’t explain why it has started to incorporate this alternative dataset for the organisation’s most influential member.

Key Opec+ members led by the Saudi Arabia and Russia will hold a video conference on September 7 to consider their next move.