By: Economy Middle east

OPEC has cut its forecast for global oil demand in the second quarter by 500,000 barrels per day, according to its monthly oil report, marking the group’s first public assessment of the impact of the U.S.–Iran conflict on the market.

The Organization of the Petroleum Exporting Countries expects a smaller drag on oil demand this year from the conflict than some other forecasters, including the U.S. government’s Energy Information Administration. The group also kept its full‑year demand outlook unchanged, anticipating that consumption will pick up in the later months of the year.

The conflict has effectively shut the Strait of Hormuz, the world’s most important oil‑shipping route, cutting off millions of barrels of Middle East production and driving fuel prices sharply higher. The price surge is putting pressure on consumers and businesses worldwide and prompting governments to take steps to conserve supplies.

Global oil demand is projected to average 105.07 million barrels per day in the second quarter, the OPEC report said, down from the previous estimate of 105.57 million barrels per day.

“The demand growth for the second quarter of 2026 is revised down for both the OECD and non‑OECD, driven mainly by slight transitory weakness in oil demand growth, given ongoing developments in the Middle East,” OPEC said, referring to countries inside and outside the Organisation for Economic Co‑operation and Development group of advanced economies.

OPEC maintained its forecast that global oil demand will rise by 1.38 million barrels per day in 2026, in contrast to the EIA, which cut its year‑on‑year growth projection by half in an April 7 report.

Resuming production increases

OPEC+, which includes the Organization of the Petroleum Exporting Countries plus producers such as Russia, had agreed to resume gradual oil production increases from April, although the monthly report highlighted how sharply output has fallen since the Iran conflict erupted at the end of February.

Crude oil output by OPEC+ averaged 35.06 million barrels per day in March, a drop of 7.70 million barrels per day from February, according to secondary sources cited in the report, with Iraq and Saudi Arabia posting the largest declines.

OPEC+ agreed on April 5 to raise its collective output quotas by 206,000 barrels per day for May, a modest increase that is expected to remain largely on paper as long as key members are unable to ramp up production due to the effective blockade of the Strait of Hormuz.