OPEC points to smaller 2026 oil supply deficit as OPEC+ pumps more

Oct 14, 2025 News

LONDON, Oct 13 (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 Organisation 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. added five new elements to its list of restricted rare earth exports. 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.

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oil, oil supply deficit, OPEC, Petroleum Exporting Countries

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