Opec has slightly increased its global oil demand forecast for 2026, expecting a tighter market amid economic momentum that is expected to continue next year.
Demand for crude is expected to grow by 100,000 barrels per day to 1.4 million bpd, with a slower expansion in supplies from Opec's rivals, the Vienna-based alliance of oil-producing nations said in its monthly market report for August on Tuesday.
Crude demand in the Organisation of Economic Co-operation and Development countries is projected to grow by 200,000 bpd, while non-OECD nations would register a 1.2 million bpd rise, it said.
Opec, however, kept its 2025 demand growth view unchanged at 1.3 million bpd.
The group also revised its 2025 economic growth forecast higher, to 3 per cent, expecting the "strong momentum" in the first half of 2026 to continue into the later part of the year. Growth estimate this year, however, remained unchanged at 3.1 per cent.
Growth in the US, the world's largest economy, was slightly revised upwards to 1.8 per cent for this year and remained at 2.1 per cent in the next.
"The global economy continues to follow a stable growth trajectory ... economic data at the start of the second half of 2025 further confirms the resilience of global growth, despite persistent uncertainties related to US-centred trade tensions and broader geopolitical risks," Opec said.
It did, however, warn that relations between the US and its partners, strained to various degrees by President Donald Trump's sweeping tariffs, may be a root of trade-related uncertainties that may cause disruption in activity and some inflationary effects.
"Nonetheless, a range of fiscal and monetary policy measures is expected to help offset these effects ... the forecast assumes that reasonable trade agreements will be maintained with most key US trading partners, allowing global economic uncertainty to ease further in the coming months," Opec said.
Oil markets have remained volatile in a year featuring Mr Trump’s tariff plans and the Iran-Israel conflict.
Prices started the year strongly. The closing price of Brent, the benchmark for two thirds of the world's oil, peaked at more than $82 a barrel on January 15, while West Texas Intermediate, the gauge that tracks US crude, hit almost $79 per barrel on that day.
However, demand concerns, a slowing global economy and less-than-stellar growth in China, the world's largest crude importer, have dampened prices this year.
Oil is also under pressure as members of Opec+ alliance of crude producers, led by Saudi Arabia and Russia, continue to boost supply. This month, the group agreed to increase oil production by 547,000 bpd for September as members unwind voluntary cuts introduced during the Covid-19 pandemic.
That followed a 548,000 bpd rise in August and 411,000 bpd from May, June and July.
However, Opec's report on Tuesday showed the group raised production by 335,000 bpd in July.
Oil prices were down on Tuesday at 5.41pm UAE time, with Brent retreating 0.47 per cent to $66.32 a barrel.
West Texas Intermediate shed 0.72 per cent to $63.50. Both benchmarks are down more than 11 per cent so far in 2025 against a backdrop of volatile trading.
