OPEC sees slower demand growth this year as production falls more than 30% on Hormuz closure
Global demand is facing constraints because supply from the Persian Gulf has been effectively cut off by Iran's blockade of the Strait of the Hormuz.
ValVades
Oil production among OPEC members fell further in April and is down more than 30% since the start of the Iran war in late February, the cartel said in its latest monthly update on Wednesday.
OPEC also lowered its demand growth forecast for 2026 to around 1.2 million barrels per day, down from about 1.4 million bpd previously. Global demand is facing constraints because supply from the Persian Gulf has been effectively cut off by Iran's blockade of the Strait of the Hormuz.
OPEC production fell by 1.7 million bpd in April after output plunged by 7.9 million bpd in March. In total, production among OPEC members has fallen more than 30%, or 9.7 million bpd, during the war.
The update Wednesday from OPEC will likely be the last one to include data from the United Arab Emirates, which left the cartel on May 1.
The total supply loss from the Gulf oil producers now exceeds a billion barrels with more than 14 million bpd shut down due to the Hormuz closure, according to the International Energy Agency's latest update published Wednesday
Gulf oil production during Iran war
| Iran | 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, production in thousands of barrels per day
In contrast to OPEC's rosier outlook, the IEA sees oil demand falling by 420,000 bpd in 2026. The IEA is a Paris headquartered group of mostly Western nations that coordinate to ensure energy security.
The actual gap between supply and demand is much smaller because the market had a surplus of oil heading into 2026, the IEA said. Producers and consumers are alsk taking action to mitigate the loss, the group said.
Saudi Arabia and the UAE have redirected some exports to ports that bypass Hormuz, the IEA said. Producers outside the Middle East, particularly the U.S., have surged exports to record levels response to the crisis.
Government and commercial stockpiles also helped mitigate the losses, the IEA said. But oil inventories are depleting at a record pace due to the mounting supply loss from the closure of Hormuz. Inventories fell by 250 million barrels, or 4 million bpd, over March and April, according to the IEA.
The oil market will likely see more price volatility as the peak summer demand period nears, the IEA said.
