Oil Prices Plummet as OPEC Cuts Demand Projections and Middle East Tensions Rise

Oil prices dipped in volatile trading on Wednesday after forecasters cut projections for global oil demand in 2026. The Organisation of Petroleum Exporting Countries (OPEC) lowered its world oil demand growth forecast for 2026 to 580,000 barrels per day. Meanwhile, the International Energy Agency slashed its own 2026 demand projections, expecting a 1.6 million bpd contraction this year.

The OPEC report also noted that US crude inventories rose sharply last week, according to preliminary American Petroleum Institute data. If confirmed by the Energy Information Administration, this could ease market concerns about supply tightness. The Organisation of Petroleum Exporting Countries is a cartel of 13 oil-producing countries.

Attacks on ships in the Middle East continued to put downward pressure on prices. Two ships were attacked in the region on Tuesday, with one in the Strait of Hormuz and another in the Bab el-Mandeb Strait. These waterways are crucial export routes for Middle Eastern oil and gas.