OPEC maintains unchanged global oil demand outlook; market closely monitors US-Iran situation development

On Wednesday local time, OPEC maintained its global oil demand growth forecasts for this year and next, and stated that due to declines in production from Venezuela, Iran, and Kazakhstan, the overall OPEC+ output in January decreased.

In the latest monthly report, OPEC expects global oil demand to increase by 1.34 million barrels per day in 2027, slightly below the 1.38 million barrels per day increase projected for 2026. This growth is supported by easing inflation, supportive fiscal policies in various countries, and improvements in global trade.

In the second quarter of this year, global demand for OPEC+ crude averaged 42.2 million barrels per day, down from 42.6 million barrels per day in the first quarter, consistent with last month’s report.

The monthly report noted that world oil demand is supported by the recovery of air travel and road transportation, while a weakening US dollar against a basket of currencies has also boosted demand. A weaker dollar makes dollar-denominated commodities cheaper for overseas buyers, providing some support to global demand.

During Wednesday’s US trading session, Brent crude traded around $70 per barrel, while US WTI crude was slightly below $65 per barrel. Traders are closely watching the latest developments in US-Iran relations, fearing that any escalation could disrupt energy supplies.

In January, OPEC crude oil production decreased by 135,000 barrels per day to 28.45 million barrels per day; including Russia and other OPEC+ members, total output fell by 439,000 barrels per day to 42.45 million barrels per day, with Kazakhstan experiencing the most significant decline.

Venezuela’s production decreased by 87,000 barrels per day to 830,000 barrels per day, and Iran’s production fell by 81,000 barrels per day to 3.13 million barrels per day. These figures are based on secondary sources cited by OPEC.

As the group controlling about half of the world’s oil production, OPEC+ announced that they have decided to pause production increases until the end of March and plan to review future output policies during an online meeting on March 1.

In a cautious stance, Saudi Arabia, the largest oil exporter in the Middle East, has continued to cut its main crude oil prices for Asian buyers for the fourth consecutive month.

The OPEC report also pointed out that other oil-producing countries outside of OPEC+ (such as Brazil, Canada, Qatar, and Argentina) are expected to increase their production by 610,000 barrels per day by 2027, slightly below the 630,000 barrels per day increase projected for this year.

(Source: Cailian Press)