OPEC expects solid second-half of 2025 for world economy, trims 2026 supply

The logo of the Organization of the Petroleum Exporting Countries is seen outside of OPEC's headquarters in Vienna, Austria, on March 3, 2022. (AP Photo/Lisa Leutner, File)

LONDON — OPEC said on Monday it expected the global economy to remain resilient in the second half of this year and trimmed its forecast for growth in oil supply from the United States and other producers outside the wider OPEC+ group in 2026.

In a monthly report which did not mention the Israel-Iran conflict, the Organization of the Petroleum Exporting Countries also left its forecasts for global oil demand growth unchanged in 2025 and 2026, after reductions in April. It said the economic outlook was robust despite trade concerns.

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A solid economy shrugging off trade conflicts and a slowdown in supply growth outside OPEC+ - which groups OPEC plus Russia and other allies - would make it easier for OPEC+ to balance the oil market. Rapid growth from U.S. shale and from other countries has weighed on prices in recent years.

“The global economy has outperformed expectations so far in the first half of 2025,” OPEC said in the report.

“This strong base from the first half of 2025 is anticipated to provide support and sufficient momentum into a sound second half of 2025. However, the growth trend is expected to moderate slightly on a quarterly basis.”

Oil jumped on Friday nearing US$80 a barrel after air strikes by Israel and Iran raised concern about regional supply, having in recent weeks come under pressure from OPEC+’s output hikes and from U.S. President Donald Trump’s tariffs.

Sources have told Reuters that behind OPEC+’s plan to ramp up oil output more rapidly in May, June and July than first planned is also the objective of taking on U.S. shale production to win back market share.

In the report, OPEC said supply from countries outside the Declaration of Cooperation - the formal name for OPEC+ - will rise by about 730,000 barrels per day in 2026, down 70,000 bpd from last month’s forecast.

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OPEC now expects U.S. output of tight oil, another term for shale, to hold steady next year at 9.05 million barrels per day. Last month, it expected small growth year on year and in January had forecast output in 2026 would reach 9.28 million bpd.

“The 2026 forecast assumes sustained capital discipline, further drilling and completion efficiency gains, weaker momentum in drilling activities and increased associated gas production in key shale oil regions,” OPEC said of tight oil.

Kazakhstan’s output falls

OPEC’s report also found production by OPEC+ rose in May by 180,000 bpd to 41.23 million bpd, less than the 411,000 bpd hike called for by the group’s increase in its May quotas.

The actual hike was smaller than the headline increase in quotas partly because some nations, such as Iraq, cut output as part of a pledge to make further reductions for earlier pumping above targets.

Output in Kazakhstan, which is under pressure to boost compliance with OPEC+ quotas, also declined, falling by 21,000 bpd in May to 1.803 million bpd, still above its quota.

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Alex Lawler, Reuters

Additional reporting by Olesya Astakhova and Vladimir Soldatkin, editing by Emelia Sithole-Matarise