OPEC Lowers Oil Demand Forecast as US Tariffs Rattle Global Markets

OPEC has revised its global oil demand growth forecast for 2025, trimming it to 1.3 million barrels per day (bpd), down from the previously expected 1.4 million bpd. The move comes amid growing global economic uncertainty, largely driven by U.S. tariffs imposed by President Donald Trump. These tariffs, recently suspended for 90 days, have triggered a trade war that’s dampened manufacturing, slowed international trade, and pushed oil prices down more than 10% this month. The price of OPEC’s crude oil basket also dropped to $66.25 per barrel, a notable slide from $70.85 last Friday.

OPEC’s April Monthly Oil Market Report also downgraded its global economic growth forecast to 3.0% for this year and 3.1% for 2026, citing rising concerns over trade-related volatility. While oil prices initially held firm after the report’s release, long-term concerns remain. Brent crude hovered near $66 a barrel, supported slightly by U.S. tariff exemptions, but industry analysts warn that ongoing instability could continue to suppress demand.

The report highlighted that OPEC+ crude production slipped by 37,000 bpd in March to 41.02 million bpd, mostly due to output cuts in Nigeria and Iraq. However, Kazakhstan exceeded its production quota again, reaching 1.852 million bpd—well above its 1.468 million bpd limit. The country’s energy ministry has since committed to compensating for the overproduction in April. Meanwhile, OPEC+ is set to raise output by 411,000 bpd in May, though the group stated this increase may be paused or reversed depending on how markets respond.

Looking ahead, OPEC remains more optimistic than the International Energy Agency (IEA), which expects oil demand to peak within the decade due to a shift toward cleaner energy. The IEA is expected to release its updated forecast tomorrow. In the meantime, the next key decision on output levels from the OPEC+ coalition, including top producers like Saudi Arabia and Russia, is scheduled for May 5 as the group continues to navigate a fragile economic and energy landscape.

Source: Punch