Brazil to be largest source of output expansion

OPEC has downgraded its forecast for US oil supply growth next year, paving the way for Brazil to become the largest source of non OPEC output expansion in 2026, according to its latest Monthly Oil Market Report (MOMR).

US liquids output is now expected to rise by just 130,000 barrel per day — down by 80,000 bpd from last month's report and sharply lower than the 510,000 bpd projected in January. The revision reflects sustained capital discipline and weaker momentum in drilling activity, the MOMR said. It follows a series of earlier downgrades to US oil supply growth for both this year and next.

Brazilian supply is forecast to increase by 160,000 bpd in 2026, making it the top contributor to non OPEC Plus growth.

Total non OPEC Plus supply is now projected to grow by 630,000 bpd next year — 100,000 bpd less than previously expected. OPEC left its 2025 non OPEC supply growth forecast unchanged at 810,000 bpd.

OPEC Plus crude output — including Mexico — rose by 335,000 bpd to 41.94 million bpd in July, based on an average of secondary sources including Argus.

The group estimates the call on OPEC Plus crude at 42.5 million bpd in 2025 and 43.1 million bpd in 2026.

On the demand side, OPEC has raised its 2026 global oil demand growth forecast by 100,000 bpd to 1.38 million bpd, bringing total demand to 106.52 million bpd. The upgrade reflects stronger expectations for consumption in the US, Europe, the Middle East and Africa.

Demand growth for 2025 was left unchanged at 1.29 million bpd, with total consumption seen at 105.14 million bpd.

But there remains considerable uncertainty regarding global oil demand, with other outlooks such as the IEA projecting much lower consumption.

The IEA sees oil demand growing by just 700,000 bpd to 103.68 million bpd in 2025, and by another 720,000 bpd to 104.40 million bpd in 2026. This equates to a gap of about 1.5 million bpd between OPEC and the IEA 2025 demand projections, rising to more than 2 million bpd in 2026.