OPEC Revises Oil Demand Growth Forecast Over US Tariffs
The Organisation of the Petroleum Exporting Countries (OPEC) on Monday slightly cut its forecast for oil demand growth, citing the impact of US tariffs on the world economy.
A report by Reuters quoting the OPEC Monthly Oil Market Report for April said the Secretariat now sees demand growing by 1.3 million barrels per day in 2025, down from a previous forecast of 1.4 million bpd.
Both forecasts are down 150,000 bpd from last month’s figures.
The price of OPEC’s basket of twelve crudes fell to $66.25 a barrel on Monday, compared with $70.85 the previous Friday, according to OPEC Secretariat calculations.
U.S. President Donald Trump’s trade tariffs as well as a plan for higher output by OPEC+, which includes OPEC and allies such as Russia, have put downward pressure on oil prices this month and raised concern about economic growth.
Recall that Trump recently imposed a widely imposed tariff on exports by Nigerian businesses and other countries.
The regime, now suspended for 90 days, has ignited a trade war, raised the prices of goods and services for consumers, weakened the standard of living, slowed down manufacturing activities and hindered international trade.
In the report, OPEC lowered its world economic growth forecast this year to 3.0 per cent from 3.1 per cent and reduced next year’s to 3.1 per cent from 3.2 per cent.
Last month, OPEC said trade concerns would contribute to volatility but had kept forecasts steady, saying the global economy would adjust.
“The global economy showed a steady growth trend at the beginning of the year; however, recent trade-related dynamics have introduced higher uncertainty to the short-term global economic growth outlook,” OPEC said in Monday’s report.
Oil prices maintained an earlier gain after the report was released, with Brent crude trading near $66 a barrel following U.S. exclusions on some tariffs. Prices have still dropped over 10 per cent so far this month.
OPEC’s oil demand view is still at the higher end of industry forecasts, and it expects oil use to keep rising for years, unlike the International Energy Agency, which sees demand peaking this decade as the world switches to cleaner fuels.
The IEA is scheduled to update its oil demand forecasts on Tuesday.
OPEC’s report also showed that crude production by the wider OPEC+ fell in March by 37,000 bpd to 41.02 million bpd, due in part to reductions by Nigeria and Iraq.
The group is scheduled to raise output in April and again in May as part of a plan to unwind its most recent layer of oil output cuts, which were put in place to support the market.
But the report also showed, ahead of the scheduled hikes, that Kazakhstan, which has persistently exceeded its OPEC+ output target, increased production further in March by 37,000 bpd, breaching the restrictions again.
The Central Asian country’s production rose to 1.852 million bpd last month, above its OPEC+ quota of 1.468 million bpd for January-March.
The energy ministry said last Thursday that Kazakhstan exceeded its OPEC+ quota in March but would fulfil its commitments in April and partially compensate for earlier overproduction, according to Interfax news agency.
An industry source told Reuters on Monday that Kazakhstan’s oil output fell in the first two weeks of April from the March average but was still above the OPEC+ quota.
The development comes after the eight OPEC+ countries, which previously announced additional voluntary adjustments in April and November 2023, namely Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman, met virtually on 3 April 2025 to review global market conditions and outlook.
The eight participating countries will implement a production adjustment of 411 thousand barrels per day, equivalent to three monthly increments, in May 2025.
This comprises the increment originally planned for May in addition to two monthly increments. “The gradual increases may be paused or reversed subject to evolving market conditions,” OPEC+ had said in a note after the meeting.
The eight OPEC+ countries also noted that this measure will provide an opportunity for the participating countries to accelerate their compensation.
The eight countries will meet on the 5th of May to decide on June production levels.
