OPEC lowered its second-quarter global oil demand forecast by 500,000 barrels per day in its monthly report today. The producer group attributed the revision to geopolitical conflict and the ongoing blockade of the Strait of Hormuz. This transitory weakness affects both OECD and non-OECD nations.
Saudi Arabia, Iraq, Kuwait, and the UAE experienced sharp production shut-ins in March. These output declines resulted from the effective closure of the world's most critical oil chokepoint.
OPEC maintained its full-year demand growth forecast despite the near-term reduction. The group anticipates a consumption rebound later this year, contrasting with a more pessimistic outlook from the US Energy Information Administration.