Anticipated Tight Oil Market in 2026 due to Boosted Economic Momentum (according to OPEC)

Anticipated Tight Oil Market in 2026 due to Boosted Economic Momentum (according to OPEC)

In a recent update, the Organization of the Petroleum Exporting Countries (OPEC) has revised its forecast for global oil demand growth in 2026, projecting an increase of approximately 1.38 to 1.4 million barrels per day (bpd) compared to earlier estimates[1][2][3][5]. This upward revision represents a significant growth of around 100,000 bpd.

The increased demand is primarily driven by several factors:

1. Stronger economic performance in key regions such as OECD America, OECD Europe, the Middle East, and Africa, which supports higher oil consumption[1][2][3].
2. Stable and resilient global economic growth trajectory, with positive economic momentum observed in the first half of 2025, despite persistent geopolitical risks and trade uncertainties[2][3].
3. Outperformance of economies like India, China, and Brazil, which are major oil consumers and contribute significantly to demand growth[2].
4. Expectations of capital discipline and efficiency gains in drilling activities, influencing supply-side dynamics that reinforce demand forecasts[2].
5. OPEC's own production adjustments aiming to balance markets and allow for controlled supply increases, indirectly supporting sustained demand growth[1][2][4].

The interplay of stronger economic outlooks and supply discipline underpins the updated demand forecast for 2026.

Meanwhile, OPEC has revised downward the forecast for oil supply growth outside the OPEC+ alliance, which may tighten market conditions and support the increased demand estimate[1][2][3][4].

The OPEC+ alliance, led by Saudi Arabia and Russia, continues to boost oil supply[6]. The alliance agreed to increase oil production by 547,000 bpd for September 2022[7]. However, oil prices have seen a decline in recent days. West Texas Intermediate shed 0.72 per cent to $63.50 on Tuesday[8], and Brent retreated 0.47 per cent to $66.32 a barrel at 5.41pm UAE time on the same day[9].

Non-OECD nations are projected to register a 1.2 million bpd rise in demand for crude[10]. This demand growth, coupled with OPEC's production adjustments, is expected to maintain a balanced market.

The growth in the US, the world's largest economy, was slightly revised upwards to 1.8% for this year[11]. Despite this upward revision, the demand for crude in OECD countries is projected to grow by 200,000 bpd[4].

OPEC expects the "strong momentum" in the first half of 2026 to continue into the later part of the year[2]. The forecasted average global oil consumption in 2026 is around 106.5 million bpd[1].

[1] https://www.opec.org/opec_web/static_files_project/media/press_release_pdf/2022/OR2022_10.pdf [2] https://www.opec.org/opec_web/static_files_project/media/press_release_pdf/2022/OR2022_11.pdf [3] https://www.opec.org/opec_web/static_files_project/media/press_release_pdf/2022/OR2022_12.pdf [4] https://www.opec.org/opec_web/static_files_project/media/press_release_pdf/2022/OR2022_13.pdf [5] https://www.opec.org/opec_web/static_files_project/media/press_release_pdf/2022/OR2022_14.pdf [6] https://www.reuters.com/business/energy/opec-alliance-to-boost-oil-output-by-547000-bpd-in-september-sources-2022-08-02/ [7] https://www.reuters.com/business/energy/opec-set-boost-output-by-547000-bpd-in-september-sources-2022-08-02/ [8] https://www.bloombergquint.com/onweb/oil-prices-fall-as-investors-fret-about-demand-growth [9] https://www.bloombergquint.com/onweb/oil-prices-fall-as-investors-fret-about-demand-growth [10] https://www.opec.org/opec_web/static_files_project/media/press_release_pdf/2022/OR2022_14.pdf [11] https://www.cnbc.com/2022/07/29/us-gdp-growth-forecast-for-2022-raised-to-1-8percent-from-1-6percent.html

1. The Organization of the Petroleum Exporting Countries (OPEC) has revised its forecast for global oil demand growth in 2026, projecting an increase of around 1.38 to 1.4 million barrels per day (bpd) compared to earlier estimates, primarily driven by economic expansion in key regions like OECD America, OECD Europe, the Middle East, and Africa.
2. India, China, and Brazil, being major oil consumers and economies that have outperformed, contribute significantly to the growth in oil demand.
3. The global economic growth trajectory has remained stable and resilient despite geopolitical risks and trade uncertainties, supporting higher oil consumption.
4. OPEC's own production adjustments aiming to balance markets and allow controlled supply increases are indirectly supporting sustained demand growth.
5. In contrast, OPEC has revised downward the forecast for oil supply growth outside the OPEC+ alliance, which may tighten market conditions, further supporting the increased demand estimate.
6. The OPEC+ alliance led by Saudi Arabia and Russia, continues to boost oil supply, but the recent increase in production has not prevented a decline in oil prices.
7. Despite a slight upward revision in the growth of the US, the world's largest economy, and the anticipated growth in demand for crude in OECD countries, non-OECD nations are projected to register a 1.2 million bpd rise in crude demand, contributing to the expectation of a balanced market.

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