Global oil demand is set to accelerate sharply in 2027 as economic activity strengthens outside advanced economies, while refinery outages and low inventories are keeping refined-product markets relatively tight, according to the Organization of the Petroleum Exporting Countries’ (OPEC) August 2026 Monthly Oil Market Report.
OPEC expects world oil demand to increase by 2.2 million barrels a day in 2027, an upward revision from its previous assessment. That compares with growth of just 580,000 barrels a day in 2026, which was slightly downgraded from the prior forecast.
The outlook points to a market where demand is increasingly being driven by emerging economies, even as consumption in much of the developed world remains subdued. Non-OECD (Organisation for Economic Co-operation and Development) countries are expected to account for about 1.8 million barrels a day of demand growth in 2027, compared with 300,000 barrels a day in OECD economies.
The report comes as the oil market enters the second half of the year with crude prices lower than in June but refined-product markets showing signs of tightness.
Refinery Market Tightens
Global refinery intake increased by 1.4 million barrels a day in July, as maintenance ended in North America and Europe and some Middle Eastern capacity returned to operation.
OPEC said refinery utilization exceeded 78% in July, with strong demand for middle distillates, supply disruptions and relatively low product inventories encouraging refiners to maximize crude processing.
However, refinery outages remain above historical levels because of disruptions in Eastern Europe and the Middle East, while maintenance in Asia, particularly China, has constrained some capacity.
OPEC expects refinery operations to strengthen further as seasonal maintenance concludes and additional capacity returns. But it said geopolitical developments remain a key source of uncertainty for the outlook.
The pressure is particularly visible in middle-distillate markets. In Europe, the gasoil crack spread against Brent averaged $72.45 a barrel in July, up $27.17 from June and $44.14 from a year earlier. OPEC attributed the increase to Russia’s diesel export ban, refining outages and already-tight supplies.
Winter Demand Adds Support
OPEC expects the approaching northern-hemisphere winter to provide another boost to fuel demand.
OECD heating-fuel demand is forecast to increase by about 70,000 barrels a day year-on-year in the fourth quarter of 2026, with the largest increase expected in the Americas. Demand is projected to rise by another 100,000 barrels a day year-on-year in the first quarter of 2027.
That seasonal demand comes as OECD commercial oil inventories remain below recent historical averages. Stocks fell by 26.4 million barrels in June to 2.729 billion barrels, leaving inventories 59.6 million barrels below a year earlier and 66.5 million barrels below the latest five-year average.
Crude Prices Ease
Despite the tighter refined-product market, crude prices weakened in July.
OPEC’s Reference Basket fell $6.76 a barrel from June to an average of $82.99, while Brent averaged $83.97 and West Texas Intermediate averaged $79.22.
OPEC said prices fell sharply in the final week of July as signs of easing geopolitical tensions reduced some of the risk premium built into crude prices.
West African crude also came under pressure. Nigerian grades faced weaker buying interest from Asian refiners and competition from alternative Atlantic Basin supplies, while an overhang of unsold Nigerian cargoes persisted late in the trading cycle.
OPEC Supply Rises
Production from countries participating in the Declaration of Cooperation increased in July, with crude output rising 1.42 million barrels a day month-on-month to 37.66 million barrels a day, according to secondary sources cited by OPEC.
At the same time, liquids production from countries outside the OPEC-led cooperation framework is expected to rise by 600,000 barrels a day in 2026, reaching an average of 54.8 million barrels a day. Brazil, the US, Canada and Argentina are expected to be the main contributors.
That additional supply could limit the upside for crude prices even as demand strengthens, particularly if refinery capacity continues to recover and more barrels reach the market.
Africa’s Oil Demand to Grow
Africa’s oil consumption is expected to increase to an average of 5.05 million barrels a day in 2026, up from 4.92 million barrels a day in 2025, according to OPEC’s regional forecasts. Demand is projected to rise further to 5.2 million barrels a day in 2027.
The broader African outlook is therefore one of rising consumption even as the global market becomes increasingly shaped by emerging-market demand.
For oil-producing economies, the combination of stronger regional consumption, refinery investment and changes in global refined-product markets could have important implications for crude exports, fuel imports and domestic refining economics.
Nigeria, for example, is benefiting from higher domestic refining capacity, including improved fuel supply from the Dangote refinery, which OPEC said should support energy availability and reduce some import-related pressures.
Overall, OPEC’s August report points to a market facing competing forces, faster demand growth in 2027, rising non-OPEC supply, recovering refinery capacity and still-low inventories. The balance between those factors, alongside geopolitical risks and winter fuel demand, is likely to determine the direction of oil and refined-product prices in the months ahead.
