Finance · 12 August, 2026 · 2 min read
Oil Prices Rise as OPEC Cuts 2026 Demand Growth Forecast Amid US-Iran Talks Deadlock
OPEC lowers 2026 global oil demand growth to 580,000 bpd. This marks OPEC's fourth straight downward revision to 2026 demand growth.
IEA vs OPEC: demand outlook split (decline vs growth).
3 of 5 outlets skipped it: IEA says supply risks remain elevated; mentions 8.3 mb/d shut in Gulf..
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Same story, two versions
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Oil & Gas Journal
“Global oil demand is now projected to decline by 1.6 million b/d in 2026”Read the original ↗
Kurdistan24
“global oil demand will grow by 600,000 barrels per day in 2026 and climb further to 2.2 million”Read the original ↗
Signals conflicting expectations about how much demand destruction is permanent.
Demand cuts rattle oil
Oil prices rose slightly on Wednesday as investors weighed US-Iran talks deadlock against lower demand projections, with Brent futures settling up 7 cents at $88.98 a barrel and U.S. West Texas Intermediate rising 7 cents to $83.27, Reuters reported.
The shift came after OPEC lowered its world oil demand growth forecast for 2026 to 580,000 barrels per day in its monthly oil market report, while the International Energy Agency cut its 2026 demand projections and expected a 1.6 million bpd contraction this year.
In parallel, the IEA said the closure of the Strait of Hormuz was deepening the demand hit, forecasting demand would drop by 1.6 million barrels a day in 2026, 510,000 barrels a day more than its last monthly prediction in July, according to CNBC.
The IEA also warned that “Renewed hostilities and maritime disruptions” were undermining efforts to boost global oil supply, leaving it 6.3 million barrels a day lower year-on-year in July, the CNBC report said.
Competing forecasts, market pressure
OPEC and the IEA diverged sharply on 2026 demand, with OPEC projecting global oil demand growth of 600,000 barrels per day in 2026 in its August report, down from 800,000 bpd in its July assessment, according to CGTN. The same CGTN report said OPEC continued to revise up its forecast for 2027, estimating global oil demand would rise by about 2.2 million bpd year-on-year, compared with the previous estimate of 1.9 million bpd year-on-year.
Reuters also tied the market’s limited upside to the demand outlook, noting that futures were under pressure after forecasters revised down their oil demand outlooks as U.S.-Iran talks stall. In a separate Reuters-cited note, Simon-Peter Massabni, head of business development at brokerage XS.com, said, “The continued strength in oil prices comes as markets grow increasingly doubtful that an agreement can soon be reached” to ease disruptions to crude flows.
Supply risks and deficits
Beyond demand, the IEA warned that supply risks remained elevated, projecting a 4.3 million b/d average decline in global oil supply in 2026 and a rebound to 110.3 million b/d next year, according to Oil & Gas Journal. OThe IEA also forecast a deficit of 1.8 million b/d in third-quarter 2026, more than double the estimate of around 800,000 b/d in last month’s report, while saying “risks remain substantial and the urgency of reopening the Strait has increased” as inventory buffers deplete.
Reuters reported that shipping disruptions continued, with the U.S. and Yemen's Iran-aligned Houthis reporting separate attacks on shipping in the Strait of Hormuz and the Bab el-Mandeb Strait on Tuesday, and shipping data showing vessels transiting the Strait of Hormuz fell to a one-week low of eight on Tuesday. Reuters added that U.S. crude stocks posted a surprise build and made their largest weekly gain since January 2023 as exports slumped, with the Energy Information Administration saying crude inventories rose by 17.4 million barrels to 424.4 million barrels in the week ended August 7.