OPEC chief rejects IEA's oil-glut forecast and sees no peak in demand as Hormuz reopens

The head of OPEC has publicly rejected a high-profile forecast from the International Energy Agency warning of a looming oil glut, insisting that global demand shows no sign of peaking even as the end of the Middle East conflict threatens to flood the market with returning supply. The clash lays bare a deepening divide between the producer group and the West's leading energy watchdog over where the oil market is heading.

The dispute was triggered by an IEA report that argued a durable resolution to the war between the United States and Iran could unleash a wave of supply. The Paris-based agency projected that global oil output could rise by roughly 8 million barrels per day next year while demand grows by only about 2 million, an imbalance it said would tip the market into a significant surplus as Middle Eastern exports normalize and the Strait of Hormuz reopens.

OPEC Secretary General Haitham al-Ghais pushed back forcefully in an interview, questioning the assumptions underpinning the projection. "What does the IEA see that OPEC and the rest don't see?" he asked, arguing that the group bases its outlook on actual consumption figures rather than speculative scenarios laden with conditions. He cautioned that dramatic forecasts risk injecting unnecessary uncertainty into already volatile markets and said it remained premature to speculate on the post-conflict outlook, even as he welcomed the peace agreement.

His comments reflect a long-running difference in worldview. OPEC has consistently maintained that oil demand will keep climbing for decades, driven by population growth and rising energy needs in developing economies, and that predictions of an imminent demand peak have repeatedly failed to materialize. The IEA, by contrast, has projected that global oil demand will plateau before the end of the decade as electrification and efficiency gains take hold. That structural disagreement now intersects with the immediate question of how quickly supply returns once the war fully unwinds.

The backdrop is the framework deal between Washington and Tehran. The two sides signed a memorandum of understanding committing to further negotiations over a 60-day window, alongside provisions to reopen the Strait of Hormuz to toll-free commercial traffic for that period and to lift US sanctions, paving the way for Iranian barrels to return to the market. Al-Ghais stressed how the past several months had underscored the strategic importance of the waterway, through which a large share of the world's oil once passed, not just for OPEC members but for global energy security.

For markets, the debate is more than academic. The IEA's glut warning has reinforced the bearish narrative that has driven crude sharply lower from its wartime peak, while OPEC's insistence on resilient demand offers a counterweight that could shape expectations for prices and investment in the second half of the year and beyond. If the producer group is right that demand stays robust, the feared oversupply may prove smaller or shorter-lived than the agency anticipates; if the IEA's projection holds, returning Middle Eastern barrels could weigh on prices well into next year.

With the war premium draining out of the market and Hormuz traffic resuming, the dueling forecasts set the terms of the next phase of the oil story, one defined less by conflict and more by the old, unresolved argument over how much oil the world will actually need.