Oil prices climbed on Thursday after the International Energy Agency warned of rising market volatility, even as OPEC revised its demand outlook downward for the year.

International benchmark Brent crude futures for July rose 0.34 per cent to $105.99 per barrel, while U.S. West Texas Intermediate crude futures for June increased 0.43 per cent to $101.45 per barrel.

OPEC has lowered its 2026 demand growth forecast to about 1.2 million barrels per day, down from a previous estimate of 1.4 million bpd, according to its latest monthly report.

The group also reported that production fell by 1.7 million bpd in April, bringing total output down by more than 30 per cent, or about 9.7 million bpd, since the onset of the Iran war in late February.

The latest update is expected to be the final one to include data from the United Arab Emirates, which formally exited the cartel on May 1.

The IEA on Wednesday
highlighted the impact of the Iran war on global oil supply, warning that the conflict continues to severely disrupt production and shipments through key routes such as the Strait of Hormuz.

The agency said the ongoing war has triggered significant supply losses across major producers, tightening global markets and increasing volatility in crude oil prices.

The IEA said more than 14 million bpd of supply has been cut, pushing total losses from Gulf producers to over a billion barrels.

It added that rising demand heading into the peak summer season is likely to drive further price volatility.

U.S. President Donald Trump met his Chinese counterpart Xi Jinping in Beijing on Thursday morning, launching a high-stakes summit expected to focus on Iran, tariffs, and Taiwan, with discussions set to continue through Friday.

Taiwan, Iran and artificial intelligence are expected to be on the agenda, besides tariffs and rare earths.