OPEC reduced its forecast for 2026 world oil demand growth to 580,000 barrels per day, down from 780,000, marking the fourth consecutive downward revision. The adjustment was detailed in the organization's monthly report released Wednesday.
The alliance of oil-producing nations has reached an agreement in principle to increase production targets by approximately 188,000 barrels per day starting in September, followed by a suspension of further increases through the fourth quarter of 2026.
Iraq, OPEC's second-largest producer and founding member, has warned it may exit the oil cartel if its production quota is not increased, citing economic strain from regional conflicts and recent disruptions. The threat comes after the UAE's departure from the organization.
The oil cartel OPEC+ has approved a modest increase to its collective oil production quotas, raising output by 188,000 barrels per day starting in July 2026, though concerns about the Strait of Hormuz may limit the practical impact of the increase.
Russia and Saudi Arabia, which together control over 20% of global oil production at 9-10 million barrels per day each, are drawing closer as OPEC faces internal turmoil. Their combined production capacity gives them significant leverage over global oil supply.
The UAE announced its withdrawal from OPEC and OPEC+ effective May 1, dealing a significant blow to the oil cartel's unity. The move comes as the organization struggles with production quotas and amid the ongoing Iran conflict affecting global energy markets.
