OPEC Revises Oil Demand Amid Iran Conflict Impact

OPEC has reduced its forecast for global oil demand due to the impact of the Iran war, projecting a lower demand of 500,000 barrels per day for the second quarter. Despite this, OPEC maintains a stable full-year outlook, expecting demand to rebound in later months.

OPEC on Monday adjusted its forecast for global oil demand downward due to the ongoing conflict in Iran, anticipating a reduction of 500,000 barrels per day in the second quarter, according to its latest monthly oil report.

The cartel, however, remains optimistic about demand recovery later in the year, contrasting predictions with the U.S. Energy Information Administration, which foresees a sharper decline. The conflict has essentially halted transit through the Strait of Hormuz, a critical oil route, causing fuel prices to spike and prompting global measures to conserve supply.

Despite the drop in demand, OPEC+ agreed to modestly increase oil production quotas in May, though actual production may remain constrained due to ongoing regional blockades.

(With inputs from agencies.)