OPEC Monthly Oil Market Report, May 2026

D C

05/26/2026

The OPEC Monthly Oil Market Report (MOMR) for May 2026 was published recently. The last month reported in most of the OPEC charts that follow is April 2026 and output reported for OPEC nations is crude oil output in thousands of barrels per day (kb/d). In the OPEC charts below the blue line with markers is monthly output and the thin red line is the centered twelve month average (CTMA) output.

OPEC 12 output decreased by 9667 kb/d from Feb 2026 to April 2026 with the largest decreases from Saudi Arabia (3344 kb/d), Iraq (2799 kb/d), Kuwait (1982 kb/d), UAE (1396 kb/d), and Iran (387 kb/d). Other OPEC producers besides the large producers affected by the closure of the Strait of Hormuz collectively saw an increase of 241 kb/d over the past 2 months.

The chart above shows output from the Big 4 OPEC producers that are subject to output quotas and where most of OPEC spare capacity currently exists (Saudi Arabia, UAE, Iraq, and Kuwait.) In the past 2 months output from the Big 4 has fallen by 9521 kb/d. OPEC spare capacity has increased to about 10069 kb/d in April 2026, though an opening of the Strait of Hormuz would be needed to utilize that spare capacity.

World demand for crude oil has decreased by 3.09 Mb/d from 2Q25 to 2Q26, probably due to higher prices and constrained crude availability.

In March preliminary OECD Commercial petroleum stocks were 2774 Mb which is 8 Mb above the 5 year average from 2021 to 2025.

Note that April DOC crude output was 33.2 Mb/d, if that level of output continues for the rest of Q2 then World Stock draw will be about 720 Mb for 2Q26.

OPEC expects US tight oil output will decrease in both 2026 and 2027.

World Oil Stocks

An interesting commentary by G&R can be found here regarding the Hormuz crisis. Regarding commercial petroleum stocks here is an excerpt:

Taken together, our analysis suggests the minimum commercial inventory required to
keep the global petroleum system functioning is approximately 5.4 billion barrels —
against reported non-SPR inventories of roughly 6.5 billion barrels at the end of
February. The implication is rather sobering. If our estimates are approximately correct,
the global energy system can realistically draw only about 1.1 billion barrels from
commercial inventories before beginning to seize up operationally.

The IEA Oil Market Report from March 2026 can be found at this link. IEA estimates about 8.21 Gb of Global petroleum inventory, if we assume the 6.5 Gb estimate for commercial inventory is roughly correct, this suggests about 1.71 Gb of Global SPR with perhaps 80% of this SPR inventory available as their are minimum levels that must be maintained in the system. so roughly 1.36 Gb of SPR. About 0.4 Gb is already scheduled for release reducing the SPR to about 1 Gb which can be added to the available commercial inventory of 1.1 Gb for a total of 2.2 Gb.

Let us assume there is a deficit of about 8 Mb/d with the Strait of Hormuz closed and a total of 2.5 Gb of available stocks at the end of Feb 2026, the stocks would last for 312 days if run down to absolute minimum levels, but note that March, April and May 2026 already account for 90 days, so we will be down to 222 days of stocks at the end of May, just over 7 months of supply left. Consider that Iran may hold off on an agreement until November 2026 to punish Trump in the mid-term elections, that adds another 5 months with stocks dwindling bringing us to 2 months of stocks to plug the gap, at that point oil prices might rise to $350/b.

Not a nice scenario, but maybe a 25% probability it will become reality.

D C

One response to “OPEC Monthly Oil Market Report, May 2026”

THC

05/26/2026

Thank you for that update DC!

With OPEC down nearly 10 mbd, that might be a nice round number to work with in terms of global daily supply/inventory losses (assuming demand is flat).

According to the analysis here (https://x.com/CRUDEOIL231/status/2059354174861754819?s=20), which I have not verified myself, it is possible that as much as nearly half of the drop in supply is being absorbed by China’s radical reduction in crude oil imports.

“Three months into the Hormuz crunch, and Beijing is completely blindsiding the market with its crude playbook. A heavyweight that easily sucked in 11mb/d over the last five years just saw its import prints plunge to 9.3mb/d in April. Now, the forward data says May and June seaborne arrivals are about to crater straight into the gutter at 6.5mb/d.”

The implications for naphtha supply in Asia is also of concern:

“Beijing explicitly told state majors like Sinopec and PetroChina to ditch chemical feedstocks and prioritize flooding the market with gas and diesel, and these plants immediately saluted by shifting their product yields by several percentage points on a dime.

As a result, the real bloodbath isn’t happening at the refining gate—it’s completely decimating the downstream petrochemical chain. With Hormuz blocked, their seaborne naphtha inflows were already sliced in half, but a 5% run cut is about to bleed domestic naphtha and LPG supplies by tens of millions of tons a quarter, sending a compounding, fatal shock straight through the petchem feedstock backbone.”

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