Finance
OPEC points to smaller 2026 oil supply deficit as OPEC+ pumps more
Published by Global Banking and Finance Review
Posted on October 13, 2025
3 min readLast updated: January 21, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on October 13, 2025
3 min readLast updated: January 21, 2026
OPEC adjusts its 2026 oil supply forecast, reducing the expected deficit as OPEC+ boosts production. The report indicates a closer match between supply and demand.
By Alex Lawler
LONDON (Reuters) -World oil supply is expected to closely match demand next year as the wider OPEC+ group increases production, an OPEC report showed on Monday, marking a change from last month's outlook, which projected a supply shortfall in 2026.
OPEC+ is adding more crude to the market after the Organization of the Petroleum Exporting Countries, Russia and other allies opted to unwind some output cuts more rapidly than previously planned. The additional supply has raised concerns of a surplus and weighed on oil prices this year.
In its monthly report, OPEC said the world economy continues to show solid growth and it maintained its forecasts for global oil demand to rise by 1.3 million barrels per day this year, and by a slightly faster rate in 2026.
"The robust global economic dynamics seen in the third quarter of 2025, coupled with upward revisions to second-quarter 2025 growth in the U.S. and Japan, as well as strong data from India and China, reinforce a stable global growth outlook," OPEC said.
OPEC DEMAND FORECASTS EXCEED INDUSTRY
OPEC's demand forecasts are at the higher end of industry estimates, as it expects a slower energy transition than other forecasters, such as the International Energy Agency. OPEC's outlook also implied a supply deficit in 2026, in contrast to the IEA and many analysts.
A large deficit gives a more comfortable backdrop for OPEC+ to proceed with its plan to pump more barrels to regain market share. But Monday's report showed the gap between OPEC and other forecasters is narrowing.
In its report, OPEC said that OPEC+ in September raised crude output by 630,000 barrels per day to 43.05 million bpd, reflecting its earlier decisions to increase output quotas.
With demand for OPEC+ crude expected to average 43.1 million bpd in 2026, the report implies the world market will see a deficit of 50,000 bpd if the wider group keeps pumping at September's rate, according to a Reuters calculation.
Last month's report had implied a deficit of 700,000 bpd in 2026 if OPEC+ kept pumping at August's rate.
Oil was trading slightly above $63 a barrel on Monday, having fallen to a five-month low last week partly due to fears of a glut.
OVERSUPPLY LOOMING
The revised outlook narrows the gap between OPEC’s projections and those of several banks, which anticipate supply will outpace demand in 2026.
A Reuters poll of analysts in September suggested the market could face an oversupply of 1.6 million bpd in 2026, driven by rising output from OPEC+ and non-OPEC producers including the United States, Brazil and Guyana.
Still, oversupply is likely to be a short-term issue, according to U.S. energy major ExxonMobil. The company sees a tighter oil market in the medium to longer term, its chief executive Darren Woods said on Monday.
The IEA's latest report implies that supply may exceed demand by about 3.3 million bpd in 2026. The agency, which advises industrialised countries, is scheduled to update its forecasts on Tuesday.
(Editing by Kirsten Donovan and Louise Heavens)
The Organization of the Petroleum Exporting Countries (OPEC) is a group of oil-producing nations that coordinates and unifies petroleum policies to ensure stable oil markets.
An oil supply deficit occurs when the demand for oil exceeds the available supply, leading to potential shortages and price increases.
Global oil demand refers to the total amount of oil consumed worldwide, influenced by economic activity, population growth, and energy needs.
OPEC+ is a coalition of OPEC members and other oil-producing countries that collaborate to manage oil production levels to stabilize prices.
Oversupply in the oil market occurs when the production of oil exceeds the demand, leading to falling prices and potential economic impacts.
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