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OPEC Forecasts World Demand for OPEC+ Crude Dropping in Q2

People walk past an installation depicting barrel of oil with the logo of Organization of the Petroleum Exporting Countries (OPEC) during the COP29 United Nations climate change conference in Baku, Azerbaijan November 19, 2024. REUTERS/Maxim Shemetov/File Photo 
People walk past an installation depicting barrel of oil with the logo of Organization of the Petroleum Exporting Countries (OPEC) during the COP29 United Nations climate change conference in Baku, Azerbaijan November 19, 2024. REUTERS/Maxim Shemetov/File Photo 
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OPEC Forecasts World Demand for OPEC+ Crude Dropping in Q2

People walk past an installation depicting barrel of oil with the logo of Organization of the Petroleum Exporting Countries (OPEC) during the COP29 United Nations climate change conference in Baku, Azerbaijan November 19, 2024. REUTERS/Maxim Shemetov/File Photo 
People walk past an installation depicting barrel of oil with the logo of Organization of the Petroleum Exporting Countries (OPEC) during the COP29 United Nations climate change conference in Baku, Azerbaijan November 19, 2024. REUTERS/Maxim Shemetov/File Photo 

The Organization of the Petroleum Exporting Countries (OPEC) on Wednesday forecast world oil demand for crude from the wider OPEC+ producer group will drop by 400,000 barrels per day in ‌the second quarter of this year, a copy of its monthly oil report on OPEC’s website shows.

World demand for OPEC+ crude ‌will average 42.20 million bpd in ⁠the second quarter, ⁠OPEC said in the report, down from 42.60 million bpd in the first quarter. Both forecasts were unchanged from last month’s report.

The OPEC+ group comprising OPEC nations, plus Russia and other allies, began raising oil output ⁠last year after years ⁠of cuts, and paused production hikes in the first quarter of 2026 amid predictions of a glut.

Eight OPEC+ members meet on ‌March 1 where they are expected to make a decision on whether to resume the hikes in April.

In the report, OPEC also left unchanged its forecasts that world oil demand will rise by 1.34 million bpd in 2027 and by 1.38 million bpd this year. The 2026 forecast is higher than that of other analysts such as the International Energy Agency.

OPEC+ pumped 42.45 million bpd in January, 2026, down 439,000 bpd from December, 2025, driven by reductions in Kazakhstan, Russia, Venezuela and Iran, OPEC said in the report.

OPEC has maintained its forecast for global oil demand in 2026 at approximately 106.5 million barrels per day (mb/d), keeping the projection it announced four months ago.

It also projected that world oil consumption will grow by 1.3 million bpd in 2027 and an average of 107.9 million bpd, unchanged from last month.

OPEC+ oil production declined last month amid losses in Venezuela and Iran, supported by geopolitical tensions, the group said.

Venezuelan and Iranian crude production declined by 87,000 barrels a day and 81,000 barrels a day, respectively.

Meanwhile, the global economic growth forecasts remained unchanged from last month's assessment at 3.1% in 2026 and 3.2% in 2027.

OPEC said world oil demand was gaining support from air travel and road transport, as well as from a drop in the value of the US dollar against a basket of currencies.

“This decline has made dollar-priced commodities, including oil, cheaper for consumers and provided some additional support for global demand,” OPEC said in the report.

Oil prices gained around 2% on Wednesday, buoyed by potential supply risks should US–Iran tensions escalate, while draws of crude from key stockpiles suggested stronger demand.

Brent crude oil futures were up $1.52, or 2.2%, at $70.32 a barrel by 01:20 GMT. US West Texas Intermediate crude rose $1.50, or nearly 2.4%, to $65.46.

 

 

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Business

Egypt Says Close to Issuing $500 Million Japan Samurai Bond

A minibus moves along a main road underneath new Cairo Monorail track as a train moves above in the Fifth Settlement, a neighborhood of the New Cairo suburb of Cairo, on May 22, 2026. (Photo by Khaled DESOUKI / AFP)
A minibus moves along a main road underneath new Cairo Monorail track as a train moves above in the Fifth Settlement, a neighborhood of the New Cairo suburb of Cairo, on May 22, 2026. (Photo by Khaled DESOUKI / AFP)
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Egypt Says Close to Issuing $500 Million Japan Samurai Bond

A minibus moves along a main road underneath new Cairo Monorail track as a train moves above in the Fifth Settlement, a neighborhood of the New Cairo suburb of Cairo, on May 22, 2026. (Photo by Khaled DESOUKI / AFP)
A minibus moves along a main road underneath new Cairo Monorail track as a train moves above in the Fifth Settlement, a neighborhood of the New Cairo suburb of Cairo, on May 22, 2026. (Photo by Khaled DESOUKI / AFP)

Egypt is finalizing plans for its first yen-denominated bond sale in three years, Foreign Minister Badr Abdelatty told Reuters on a trip to Japan on Thursday.

The African Development Bank said in December it would partially guarantee Cairo's planned $500 million-equivalent Samurai bonds on the Japanese markets this year.

"We are completing the final ⁠steps," Abdelatty said ⁠on the sidelines of an event in Tokyo, adding that he had been promoting the sale and other investment opportunities while in Japan.

"We had extensive discussions ⁠with our Japanese friends on monetary, fiscal, financial support, especially with regard to budget support and samurai bonds as well."

Egypt's economy has been boosted in recent years by major real estate investments and an $8 billion IMF loan, though the Iran war is piling pressure ⁠on ⁠its finances.

The bond sale would be Egypt's third in the currency, following issuances in 2022 and 2023.

"It will be very important, despite the fact that we've been hit hard with implications of the (Iran) war," Abdelatty said.

Business

Oil Falls as Lebanon and Israel Agree on a Ceasefire

FILE PHOTO: A drone view shows an offshore oil platform in Guanabara Bay in Niteroi, Rio de Janeiro state, Brazil, March 18, 2026. REUTERS/Pilar Olivares/File Photo
FILE PHOTO: A drone view shows an offshore oil platform in Guanabara Bay in Niteroi, Rio de Janeiro state, Brazil, March 18, 2026. REUTERS/Pilar Olivares/File Photo
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Oil Falls as Lebanon and Israel Agree on a Ceasefire

FILE PHOTO: A drone view shows an offshore oil platform in Guanabara Bay in Niteroi, Rio de Janeiro state, Brazil, March 18, 2026. REUTERS/Pilar Olivares/File Photo
FILE PHOTO: A drone view shows an offshore oil platform in Guanabara Bay in Niteroi, Rio de Janeiro state, Brazil, March 18, 2026. REUTERS/Pilar Olivares/File Photo

Oil prices fell on Thursday as a ceasefire deal between Israel and Lebanon boosted hopes for a broader agreement to end the US-Israeli war with Iran that could lead to a reopening of the Strait of Hormuz.

Brent futures were down 87 cents, or 0.89%, at $96.92 a barrel by 0458 GMT, while US West Texas Intermediate crude fell 78 cents, or 0.81%, to $95.24, paring gains from earlier in the week, said Reuters.

Both Brent and WTI rose about 2% on Wednesday after renewed Middle East hostilities including Iranian attacks on Kuwait ‌and US military strikes ‌near the Strait of Hormuz.

Israel and Lebanon ‌said ⁠late on Wednesday ⁠they had agreed to implement a ceasefire, raising hopes for a deal between Washington and Tehran, which has conditioned any agreement in part on an end to fighting between Israel and Lebanon.

US President Donald Trump suggested on Wednesday that there could be progress in negotiations with Iran as soon as this weekend.

Iranian Foreign Minister Abbas Araghchi on Wednesday said Tehran's ⁠contacts with Washington have not been cut ‌off, but no progress has been made ‌in the negotiations, adding both sides were studying the texts that were exchanged.

In ‌the US, the Republican-led House approved a resolution on Wednesday to ‌block Trump from continuing the war against Iran. To take effect, the resolution would need Senate approval and two-thirds majorities in both chambers to override an almost certain Trump veto.

Meanwhile, US crude stockpiles fell by 8 million barrels to ‌433.7 million barrels in the week ended May 29, the Energy Information Administration said on Wednesday. ⁠That was a ⁠much bigger drop than the 4-million-barrel draw analysts had expected in a Reuters poll.

The International Energy Agency warned on Tuesday that global oil inventories could hit critical levels ahead of peak summer demand if stock draws continue at their current pace, despite Chinese crude imports falling by 6 million barrels a day in May compared to March.

“Inventories have provided a cushion for the oil market. However, even if we see an imminent restart of oil flows through the Strait of Hormuz, the recovery will be slow and gradual,” a note from ING said.

“This suggests inventories are likely to continue to tighten into the third quarter, leaving upside risk to prices.”

Business

IMF Praises Saudi Economy’s Resilience

The Saudi capital, Riyadh (Reuters)
The Saudi capital, Riyadh (Reuters)
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IMF Praises Saudi Economy’s Resilience

The Saudi capital, Riyadh (Reuters)
The Saudi capital, Riyadh (Reuters)

The International Monetary Fund (IMF) affirmed that the Saudi economy has demonstrated high resilience in the face of regional geopolitical tensions that have obstructed navigation in the Strait of Hormuz.

The Fund praised the Kingdom's ability to contain the fallout from the navigation disruption through a swift logistical response, which involved redirecting oil shipments towards the East-West pipeline and Red Sea ports, leveraging the legacy of its Vision 2030 structural reforms.

“The Saudi economy is demonstrating agility and resilience, supported by robust and diversified infrastructure and the authorities’ concerted efforts to redirect shipments and ease logistical bottlenecks,” mission head Azim Sadikov said on Wednesday in the IMF's latest Article IV mission report following a visit to the Kingdom from April 28 to May 13.

“A prompt rerouting of oil through the East-West pipeline and Red Sea ports, combined with Aramco’s overseas inventories, has helped limit the drop in oil deliveries," it said.

"Saudi Arabia's strong fundamentals—low government debt, ample reserves, and a large sovereign wealth fund—provide important buffers,” the report added.

“Assuming maritime shipments through the Strait of Hormuz normalize in the coming months, a recovery could take hold, with growth this year notably lower but holding up at about 2 percent. Non-oil activity would be supported by domestic demand, underpinned by stable public employment, government spending, and the steady execution of private and public capital projects. Average inflation is projected to increase to about 2.3 percent as higher shipping and insurance costs add upward pressure on prices. Higher oil prices are expected to offset volume losses, generating a windfall that would reduce the current account and fiscal deficits in 2026.”

In its April 2026 World Economic Outlook, the IMF projected Saudi Arabia’s real GDP growth at 3.1% for 2026, 1.4 percentage points lower than a January estimate. It had said that the Kingdom was expected to be less severely affected by the war.

In the Outlook, the IMF also upgraded Saudi Arabia's 2027 GDP growth forecast to 4.5%, a 0.9% increase from previous projections. This upward revision reflected anticipated normalizations in energy output and logistics.

In Wednesday’s report, the IMF said given the Saudi economy’s resilience, “the mission considers that a modest reduction in the non-oil primary deficit in 2026 remains appropriate, with spending reprioritization as the first line of action to accommodate any fiscal response to the conflict.”

The report lauded Saudi Arabia's strong fundamentals—low government debt, ample reserves, and a large sovereign wealth fund— that provide important buffers.

It said that should the shock prove more prolonged, Saudi Arabia has the space to loosen the fiscal stance to cushion the economy, with support to affected businesses and households that should be temporary, targeted, and transparent.

As the economy normalizes, an ambitious medium-term fiscal consolidation anchored on non-oil revenue mobilization and spending rationalization is needed, it said.

On the banking sector, the IMF said: “The peg to the US dollar provides a credible monetary policy anchor and helps underpin financial stability, particularly in the current environment of heightened uncertainty.”

“The banking sector is well-positioned to weather the shock, supported by strong capital and liquidity buffers,” it added.

The mission welcomed the efforts of the Saudi Central Bank (SAMA) to step up the monitoring of liquidity, credit conditions, and asset quality. It also supported “SAMA's decision to proceed with the implementation of the 100 basis points countercyclical capital buffer, its proactive approach to containing risks from FX borrowing, and continued progress in strengthening its resolution and emergency liquidity assistance frameworks.”

The report added: “Ten years since its launch, Vision 2030 reforms have helped strengthen institutions and improve policymaking, boosting economic performance and reducing dependence on oil.”

“Sustaining the reform momentum to remove remaining impediments to diversification and to expand the role of the private sector will be key to maintaining strong growth prospects for the medium term,” it said.

In this regard, the IMF lauded PIF's recalibrated 2026–30 strategy, with its shift toward more selective capital allocation and greater private-sector crowding-in.

The report called for “improving the business environment, deepening capital markets, supporting small and medium enterprises, aligning education with labor market needs, strengthening governance, and scaling AI adoption while mitigating associated risks.”