OPEC expects oil demand to rise, partly due to summer travel

Global refinery demand for oil rose sharply month on month in June, by 2.1 million barrels per day. The return of refineries to operation after spring maintenance also helped drive the increase. According to OPEC’s monthly report, this points to a stronger oil market, with demand likely to remain high going forward.

The Organization of the Petroleum Exporting Countries (OPEC) said in its monthly oil market report that the global economy could perform better than expected in the second half of the year, despite trade conflicts. The organization also said refinery oil consumption would remain elevated to meet the summer increase in demand, helping support the demand outlook. Reuters reports.

The International Energy Agency cut its demand forecasts last week, but said the market could be tighter than it appears, as refineries increase the volume of crude oil they process to meet summer travel demand.

OPEC’s demand forecasts are at the upper end of the projections presented.

"Global refinery intake, particularly in the US, is expected to remain elevated to cover the seasonal increase in demand for transport fuels, especially gasoline, jet fuel/kerosene and residual fuel oil," the organization said in the report.

Economic growth

A solid economy would make it easier for OPEC+, which includes OPEC countries, Russia and other allies, to continue with its plan to supply more oil to the market and regain market share after years of cuts aimed at supporting prices. However, trade conflicts are shaking the global economy, particularly the threat of US trade tariffs.

"India, China and Brazil are outperforming expectations so far, while the United States and the eurozone are also seeing continued recovery compared with last year. This means economic growth in the second half of 2025 could turn out better than currently expected," OPEC said in the report.

OPEC+ had previously agreed to increase production by 548,000 barrels per day in August, further accelerating its output increases. Brent crude prices were steady after OPEC’s report was published, trading near $69 per barrel. At the end of last year, analysts estimated that Brent crude would average around $70 per barrel in 2025.

Month-on-month increase

The OPEC report also showed that OPEC+ produced 41.56 million barrels per day in June, 349,000 barrels per day more than in May. This was slightly less than the 411,000-barrel-per-day increase the group had called for by raising its June production quotas.

The actual increase was smaller than the overall quota increase, partly because some countries, including Iraq, cut production as part of a commitment to make further reductions after previously exceeding their production targets. However, production in Kazakhstan, which is under pressure to comply with OPEC+ quotas, rose last month after a slight decline in May and remained above the country’s quota.