BAKU, Azerbaijan, August 12. OPEC expects oil demand in the Middle East to decline in 2026 and recover in 2027.
According to OPEC's report, oil demand in the Middle East in May 2026 fell by 180,000 barrels per day year-over-year, following a decline of approximately 40,000 barrels per day in April.
The report notes that the decline in demand for fuel oil, petrochemical feedstocks, and transportation fuels more than offset the increase in direct crude oil consumption.
“In particular, demand for fuel oil in May fell by approximately 100,000 barrels per day year-over-year. In April, by contrast, demand for this fuel rose by about 150,000 barrels per day. Demand for naphtha and jet/kerosene fuel fell by about 70,000 barrels per day for each fuel type. Consumption of liquefied petroleum gas, gasoline, and diesel fuel decreased by approximately 20,000 barrels per day for each type.
At the same time, demand for the “other petroleum products” category, including the direct combustion of crude oil, increased by 110,000 barrels per day. The largest increase in demand in this category was in Saudi Arabia,” OPEC reports.
In addition, it is noted that in the third quarter of 2026, GDP growth in the region’s largest consumer countries is expected to slow, but growth will be supported by the non-oil sector of the economy.
"OPEC expects economic activity in the region to gradually stabilize and improve by the end of the year. Accordingly, oil demand in the Middle East is projected to decline by approximately 50,000 barrels per day year-over-year in the third quarter.
In 2026, the region’s economy is expected to remain resilient thanks to the non-oil sector, stable private consumption, and slowing inflation.
The latest Purchasing Managers’ Index (PMI) figures for the region’s largest economies also point to continued activity in the non-oil sector," the OPEC report states.
The report highlights that in Saudi Arabia, the non-oil sector PMI rose to 53 points in June from 52 points in May and 51.5 points in April.
"In the UAE, the non-oil PMI index declined slightly in June but remained in expansionary territory, standing at 51 points compared to 52.3 points in May. Annual inflation in Saudi Arabia in June 2026 remained at 1.8%, unchanged from May and in line with market expectations. Overall, oil demand in the region in 2026 is expected to decline by approximately 50,000 barrels per day on an annualized basis, averaging 8.8 million barrels per day.
In terms of petroleum products, the growth in demand in 2026 will be driven primarily by fuel oil. Some growth is also expected for diesel fuel.
According to the forecast, gasoline demand will decline slightly. In the “other petroleum products” category, demand is expected to decline for LPG, naphtha, and jet/kerosene fuel," OPEC reports.
Meanwhile, it is noted that in 2027, the region’s economy is expected to recover, and economic activity will return to full growth against the backdrop of a resilient non-oil sector and strong domestic demand.
"The economy will also be supported by infrastructure spending, a stable labor market, and slowing inflation. Growth in international air travel and automotive mobility is expected to underpin oil demand.
According to OPEC’s forecast, the region’s petrochemical industry will continue to grow in 2027.
“As a result, oil demand in the Middle East is expected to recover in 2027 and grow by approximately 0.3 million barrels per day on an annual basis, reaching an average of 9.1 million barrels per day,” the OPEC report states.
