BAKU, Azerbaijan, October 30. Global demand for oil is expected to decline by 1 million barrels per day in 2026, while in 2027 it is expected to increase by 2.6 million barrels per day.
This was stated in the OIES (Oxford Institute for Energy Studies) Oil Monthly report.
According to the report, uncertainty regarding government policy, constrained supply of petroleum products, and high prices have led to a downward revision of the global oil demand growth forecast for 2026 by 150,000 bpd.
The report noted that demand dynamics are expected to be weaker in the second half of 2026; however, analysts project a return to year-on-year growth of 890,000 bpd by Q4 2026.
"About 70% of the downward revision for 2026 is attributed to countries within the Organization for Economic Co-operation and Development (OECD). The U.S. and Europe together account for 110,000 bpd of the total reduction in the forecast.
Conversely, the demand growth forecast for 2027 has been raised by 120,000 bpd. This adjustment is almost entirely due to a lower baseline from 2026. As a result of this recovery, demand in 2027 is expected to be 1.6 million bpd higher than in 2025. Virtually all of this net growth in demand will come from non-OECD countries, while demand across OECD nations is expected to remain largely unchanged," the institute’s report said.
The OIES has also revised its estimate for the global oil deficit in 2026, reducing it by 310,000 bpd to 3.5 million bpd. Meanwhile, the forecast for a supply surplus in 2027 remains largely unchanged at approximately 900,000 bpd.
"About 60% of the reduction in the projected 2026 deficit is due to an increase in supply, primarily driven by a recovery in shipments from the Middle East during the third quarter. The remainder of the revision is attributed to weaker demand.
The deficit is still projected to widen from 2.5 million bpd in Q3 2026 to 4.5 million bpd in Q4. In Q1 2027, the deficit is expected to remain at 1.5 million bpd.
The projected supply surplus in 2027 is expected to occur almost entirely in the second half of the year, which limits the scope for any net replenishment of global inventories until that period. The anticipated net increase in stocks in 2027 will offset only about 25% of the projected decline in 2026," the institute’s report noted.
Furthermore, the OIES has raised its forecast for the average price of Brent crude by approximately $6 per barrel for both years under consideration. The institute now expects an average price of $99 per barrel for 2026 and $87 per barrel for 2027.
