OPEC Predicts Oil Demand Decline in Middle East Before Recovery in 2027
OPEC has released its latest report on oil demand trends in the Middle East, highlighting a decline in 2026 and a recovery in 2027. According to the report, oil demand in the region fell by approximately 180,000 barrels per day year-over-year in May 2026 compared to the same period in the previous year.
The decline was driven primarily by a decrease in demand for fuel oil, petrochemical feedstocks, and transportation fuels, which more than offset an increase in direct crude oil consumption. The report notes that demand for fuel oil fell by approximately 100,000 barrels per day year-over-year in May, while demand for naphtha and jet/kerosene fuel fell by about 70,000 barrels per day for each fuel type.
However, the report also highlights growth in the non-oil sector of the economy, which is expected to support economic activity in the region. In Saudi Arabia, the non-oil sector Purchasing Managers' Index (PMI) rose to 53 points in June from 52 points in May and 51.5 points in April.
OPEC expects oil demand in the Middle East to decline by approximately 50,000 barrels per day year-over-year in 2026, averaging 8.8 million barrels per day. However, the report notes that growth will be driven primarily by fuel oil, with some growth also expected for diesel fuel.
In contrast, gasoline demand is expected to decline slightly, and demand for LPG, naphtha, and jet/kerosene fuel is expected to fall in the 'other petroleum products' category. In 2027, OPEC expects the region's economy to recover, with economic activity returning to full growth against the backdrop of a resilient non-oil sector and strong domestic demand.
The report notes that growth will be supported by infrastructure spending, a stable labor market, and slowing inflation, as well as increased growth in international air travel and automotive mobility. 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.