(Bloomberg) — OPEC forecast another year of steady oil demand growth, driven by India and China, in its first detailed assessment of 2026.
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World oil consumption will increase by a “robust” 1.4 million barrels a day in 2026, equaling the pace expected for this year and surpassing the predicted growth in supplies, the Organization of Petroleum Exporting Countries said in a monthly report on Wednesday.
In theory, that should allow Saudi Arabia and its OPEC+ partners to revive halted production, ultimately restoring roughly 2 million of barrels a day over the course of the next two years. However, the cartel’s bullish outlook is undermined both by signs of faltering economic growth in China and its failure to accurately predict demand last year.
OPEC’s Vienna-based secretariat started 2024 with much stronger estimates than the rest of the industry, which it has been forced to slash by 47% in the course of six consecutive monthly downgrades. The group’s own members have shown little faith in the secretariat’s upbeat assessments, choosing repeatedly to delay plans for restarting shuttered production.
OPEC+ has been withholding supplies for the past couple of years in a bid to prop up prices. The coalition currently plans to begin gradually adding output in monthly tranches of 120,000 barrels a day from April, but will likely review whether to proceed with the plan in early March.
Market observers such as the International Energy Agency, JPMorgan Chase & Co. and Citigroup Inc. predict a global surplus this year even if OPEC+ scraps its plans to add barrels.
Still, sweeping new US sanctions on Russia and the prospect of fresh restrictions from the incoming Trump administration targeting Iran could upend the outlook. The Paris-based IEA said earlier on Wednesday that OPEC+ could have scope to open the taps if those disruptions are sufficiently severe.
Key OPEC+ members that make up its Joint Ministerial Monitoring Committee will hold an online session to review markets on Feb. 3, before they finalize plans for the second quarter in subsequent weeks.
OPEC’s report predicts that Chinese consumption will expand by 270,000 barrels a day in 2026, or 1.6%. India’s will also increase by 270,000 per day, or 4.7%. Yet China’s crude imports declined again last year, and industry officials speculate its oil demand may soon stop growing as it pivots toward electric vehicles.
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The US government’s Energy Information Administration projected a widening oil surplus in its own first look at 2026 on Tuesday. World markets will be oversupplied by 800,000 barrels a day next year, as OPEC+’s production restart coincides with growing output in the US, Canada and Guyana.
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