Oil Climbs as IEA Warns of Volatility, OPEC Trims Demand Outlook

CNBC reported Thursday that oil prices edged higher as two of the market’s most-watched bodies issued cautionary signals on supply and demand. The International Energy Agency warned of deepening volatility ahead, while OPEC scaled back its consumption growth expectations for the year.

Oil Prices Hold Above $100 as Hormuz Losses Mount

Brent crude futures for July added around 0.34% to trade near $106 a barrel. U.S. West Texas Intermediate for June climbed a similar margin, crossing $101 per barrel. Both benchmarks remain elevated against year-ago levels, reflecting persistent pressure on global supply tied to the ongoing conflict affecting the Strait of Hormuz.

The IEA said in its latest monthly report that more than ten weeks of disruption have cost the market over 14 million barrels per day of throughput. The cumulative loss from Gulf producers has now surpassed one billion barrels. The agency warned that inventories are draining at a record rate, with peak summer demand still approaching.

Analysts at ING noted in a research memo that the duration of elevated fuel prices depends heavily on geopolitical developments around the Hormuz closure and the risk of further damage to regional infrastructure.

OPEC Cuts Demand Growth View and Loses a Member

OPEC trimmed its 2026 demand growth estimate to roughly 1.2 million barrels per day, down from the prior projection of 1.4 million bpd. The downward revision reflects expectations of softer consumption as high prices weigh on economic activity.

Production within the group fell by approximately 1.7 million bpd in April alone. Since the Iran war began in late February, total OPEC output has declined more than 30%, equivalent to nearly 9.7 million bpd. The monthly report carrying those figures is also expected to be the final one incorporating data from the United Arab Emirates, which formally exited the cartel on May 1.

Background: A Market Reshaped Since February

The conflict that erupted in late February has fundamentally altered global energy flows. The Strait of Hormuz, through which roughly one-fifth of the world’s oil transits, remains severely disrupted. That choke point has become the single most consequential variable for crude pricing. Markets have repriced supply risk sharply upward since hostilities began.

Trump-Xi Meeting Adds a Diplomatic Variable

Traders are also keeping close watch on a planned meeting between U.S. President Donald Trump and Chinese President Xi Jinping. Former U.S. Commerce Secretary Carlos Gutierrez told CNBC’s Squawk Box Asia that Beijing has a strong incentive to see the conflict resolved. China is the largest buyer of oil transiting the Hormuz Strait, Gutierrez noted, adding that Xi wants the war ended as much as Trump does. Any diplomatic progress could ease supply fears and put downward pressure on prices.

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