OPEC is out today with its latest forecasts and what’s notable is the lack of changes.
For both 2026 and a whole and 2027, they’ve left demand forecasts unchanged despite the rise in oil prices. For Q2 of 2026, they have lowered it to 105.07 vs 105.57 mbpd previously. The small drop illustrates how inelastic oil demand is.
In terms of output, OPEC+ said crude output averaged 35.06 mbpd in March, down 7.70 mbpd from February due to the war in Iran.
That number likely underestimates the impact as most countries had storage space at the start of the war. Those tanks are now filled and production has been curtailed. Normally, about 20 bps of oil flows through Hormuz and that’s now less than 1 mbpd. However Saudi Arabia fired up a 7 mbpd pipeline to go west to the Red Sea and that’s operating near capacity now, despite a recent attack. There are some other pathways as well but the overall impact is in the 12 mbpd range and that compounds every day.
The good news at the moment is that negotiations appear to be ongoing despite JD Vance leaving. It’s going to be extremely tough to get the Strait back open and a lasting peace but it’s ultimately in everyone’s best interest so that’s what the market thinks will happen.
S&P 500 futures are down just 0.4%.
WTI crude oil is up $6.87 to $103.44 from a high of $105.63.
WTI crude oil daily
