Commodities Buzz: Global economy sees encouraging momentum, says OPEC

OPEC stated in its latest monthly Oil Market Report that the global economy entered 2Q26 with encouraging momentum, following a resilient and broadly steady performance in 1Q26. Growth remained supported by robust activity in non-OECD Asia, solid expansion in the US, and steady trends in several other major economies. A key positive factor has been the continued strength of investment linked to AI, which is supporting capital expenditure, high-value manufacturing, semiconductor-related trade and productivity-oriented business spending. Similarly positive, industrial production has held up well across many major economies, indicating a firm global manufacturing backdrop, while global trade has continued to expand in both volume and value terms.

According to OPEC, fiscal policy has also remained an important support factor, with targeted measures in the US, China, Germany, Japan and India helping to cushion households and businesses from higher energy costs and broader uncertainty. Importantly, monetary policies, while still data-dependent, remain relatively accommodative in several key economies or are expected to become more supportive later in the year, providing an additional stabilizing force for activity. These supportive factors have helped offset challenges related to geopolitical tensions, particularly in the Middle East, as well as related energy price volatility and trade policy uncertainty. Equity market indices have reflected this resilience, with the S&P 500 reaching all-time highs in recent weeks and expanding by around 20% from trough levels at the end of March, with similar positive trends in other important stock markets.

While geopolitical developments in the Middle East and their broader consequences have increasingly been in focus, trade policy also requires close attention in the near term. This follows a US warning that it will possibly raise tariffs on cars and trucks imported from the European Union to 25% at the beginning of July. In addition, the US administration’s 10% global blanket tariff under the so-called Section 122 will remain in place only for up to 150 days and is seen to be replaced by a new tariff framework in late July. In parallel, the United States-Mexico-Canada Agreement (USMCA) faces its six-year review deadline in July, which will likely be extended.

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