Oil Prices Rise as IEA Warns of Volatility, OPEC Trims Demand Outlook

Oil prices edged higher Thursday after the International Energy Agency warned of intensifying market volatility, CNBC reported, as the Strait of Hormuz crisis continues to strip global supply at an unprecedented rate. Brent crude futures for July rose 0.34% to $105.99 a barrel. U.S. West Texas Intermediate for June gained 0.43%, reaching $101.45 per barrel.

OPEC Trims Its 2026 Demand Growth Forecast

The OPEC producer group lowered its estimate for global oil demand growth this year. The cartel now projects expansion of around 1.2 million barrels per day, down from a prior estimate of 1.4 million bpd. The revision reflects the economic fallout from the ongoing conflict affecting Middle Eastern supply routes. OPEC’s own production dropped by roughly 1.7 million bpd in April alone. Output has now fallen more than 30%, equivalent to nearly 9.7 million bpd, since hostilities began in late February. Notably, this monthly report is expected to be the last that includes data from the United Arab Emirates. The UAE formally departed the cartel on May 1.

A Billion Barrels Lost Since the Hormuz War Began

The IEA’s latest report delivered a stark assessment of the supply shock. More than 14 million bpd of output has been curtailed since the Hormuz conflict erupted. The cumulative loss from Gulf producers has now surpassed one billion barrels in total. The agency warned that global inventories are being drawn down at a record pace. It flagged that the approach of peak summer fuel demand could amplify price swings further. Analysts at ING noted that the length of elevated prices hinges directly on the geopolitical trajectory. Continued conflict or further infrastructure damage in the region could sustain pressure well into the second half of the year.

Background: Hormuz and the Weight of History

The Strait of Hormuz has long been the world’s most critical oil chokepoint. Roughly 20% of global petroleum trade passes through the narrow waterway between Iran and Oman. Disruptions there have historically triggered sharp commodity price responses. The current closure, now extending past ten weeks, represents one of the most severe supply shocks since the 1970s oil embargoes.

Trump-Xi Meeting Adds a Diplomatic Wildcard

Traders are also watching a scheduled meeting between U.S. President Donald Trump and Chinese President Xi Jinping. China is the single largest buyer of oil that transits Hormuz. Former U.S. Commerce Secretary Carlos Gutierrez told CNBC that Beijing has a strong economic incentive to see the conflict resolved quickly. Both leaders, Gutierrez suggested, share an interest in restoring normal shipping through the strait as soon as possible.

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