OPEC slashes 2026 oil demand growth forecast by 70% as Strait of Hormuz war grinds on

OPEC's secretary-general said Monday that global oil demand will grow by just 400,000 barrels a day in 2026, a downward revision of more than 70 percent from the 1.4 million-barrel-a-day forecast the producer group issued at the start of the year. Speaking at the 25th World Petroleum Congress in Riyadh, Haitham Al Ghais said the shortfall reflects the "events" that have convulsed oil markets through the year, chief among them a war now in its eighth month that has left the Strait of Hormuz, the narrow waterway through which roughly a fifth of the world's oil normally passes, closed to most commercial shipping since late February.

"At OPEC, we have revised our demand figure forecast for this year down from the beginning of the year in tandem with the events and the unfolding of events," Al Ghais told delegates, according to a report carried by TASS. He added that OPEC does not consider the missing barrels permanently lost, projecting that pent-up consumption will push 2027 growth to 1.7 million barrels a day.

The numbers

Monday's figure is only a marginal change from the 380,000-barrel-a-day growth rate OPEC had already pencilled in for this year in its September Monthly Oil Market Report, but it is a steep comedown from the 1.4 million-barrel outlook the cartel held at the start of 2026, and it is the fifth consecutive month OPEC has trimmed its view of this year's consumption growth. The U.S. Energy Information Administration, in its own October Short-Term Energy Outlook, forecasts Brent crude averaging around $90 a barrel through the second half of 2026 before easing toward $74 in 2027, and says global oil inventories have already fallen by roughly 400 million barrels this year as Middle East output stays constrained.

Separately, seven core members of the OPEC+ coalition, Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman, agreed on October 4 to leave their combined November production targets unchanged at roughly 30.9 million barrels a day, extending a pause in supply increases that has now lasted four months, according to a report on the decision. The group's next review is scheduled for November 1, and officials have signaled that any change to output quotas is unlikely before 2027 while a capacity assessment is completed.

An eight-month crisis at sea

The demand downgrade cannot be separated from the conflict that has scrambled Gulf energy markets since late February, when American and Israeli strikes on Iranian military targets set off a war that has drawn in regional militias and repeatedly closed the Strait of Hormuz to routine traffic. Iran briefly eased restrictions after a ceasefire and a mid-June memorandum of understanding, but that arrangement collapsed within weeks after renewed attacks on commercial vessels. The IMF's PortWatch tracker, which logs ship movements through global chokepoints, recorded only a handful of transits through the strait on a recent day, against a pre-crisis average of about 85 a day.

The International Maritime Organization has issued a steady stream of statements on the standoff since March, warning of "no safe passage" for crews and, as recently as September, calling on member states to "stop attacking merchant ships and seafarers," according to the agency's own running account of the crisis. Compounding the disruption, Yemen's Houthi movement struck Riyadh's King Khalid International Airport three times over the past week, including a Saturday attack that Saudi authorities say killed at least 12 people and wounded more than 300, according to Al Jazeera's reporting. The airport remained closed for days afterward as Saudi officials investigated how air defenses failed to stop the barrage.

Who is affected

The direct toll falls first on seafarers and shipping lines still attempting Gulf transits, many of whom have rerouted tankers around the Cape of Good Hope at substantially higher cost and transit time. Oil-importing economies are absorbing elevated fuel and freight costs even as overall demand growth slows, a combination that complicates central banks' efforts to bring down inflation. Gulf producers, meanwhile, are managing budgets built around oil revenue while output remains capped below pre-conflict levels and a decision on restoring lost market share is pushed into next year. Within OPEC+, the strain has forced members to hold the line on production rather than compete for volume, a posture that has held for four straight months.

• Global 2026 oil demand growth forecast cut to 400,000 barrels a day from 1.4 million at the start of the year, a reduction of more than 70 percent.
• The Strait of Hormuz, which normally carries about a fifth of global oil trade, has been closed or severely restricted for roughly eight months.
• Seven OPEC+ members held November production targets flat at about 30.9 million barrels a day combined, with no change expected before 2027.
• Houthi strikes on Riyadh's main airport last week killed at least 12 people and wounded more than 300, shutting the facility for days.

What people are saying

"At OPEC, we have revised our demand figure forecast for this year down from the beginning of the year in tandem with the events and the unfolding of events."

Al Ghais framed the downgrade as a timing shift rather than a structural collapse in demand, telling the Riyadh congress that the world will need 23 percent more primary energy by 2050 and warning that years of underinvestment across upstream, midstream and refining capacity are already visible in tight product markets. His relatively optimistic framing, that lost 2026 barrels largely reappear in 2027, contrasts with assessments from the International Energy Agency, which has at points this year projected an outright contraction in global oil consumption rather than merely slower growth, underscoring how differently forecasters are reading the same disrupted market.

What happens next

OPEC+'s seven core producers are due to reconvene on November 1 to revisit output policy, though officials have played down expectations of any near-term increase while the group's capacity review remains unfinished. Diplomatic efforts to restore safe passage through the Strait of Hormuz have stalled repeatedly since the February ceasefire fell apart, and the IMO's monitoring task force continues to log fresh attacks on commercial vessels. OPEC's next Monthly Oil Market Report, due in the coming weeks, will show whether the 400,000-barrel growth estimate holds or becomes the sixth straight downward revision. For now, traders are left weighing a market that is simultaneously short of barrels moving through one of its most important chokepoints and short of the demand growth OPEC expected a year ago.