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OPEC has slightly cut it’s forecast for oil demand growth, citing the impact of US tariffs on the world economy. The organization now expects demand to grow 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.
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“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 its April report. Consequently, OPEC lowered its world economic growth forecast for this year to 3.0% from 3.1% and reduced next year’s forecast to 3.1% from 3.2%.
US President Donald Trump’s trade tariffs and OPEC+’s plan to increase output have put downward pressure on oil prices, raising concerns about economic growth. The price of OPEC’s basket of twelve crudes fell to $66.25 a barrel on Monday, compared to $70.85 the previous Friday.
OPEC’s oil demand view remains at the higher end of industry forecasts, expecting oil use to keep rising for years. In contrast, the International Energy Agency (IEA) sees demand peaking this decade as the world switches to cleaner fuels. The IEA is set to update its oil demand forecasts on Tuesday.
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. Kazakhstan, however, exceeded its OPEC+ quota in March, producing 1.852 million bpd, above its quota of 1.468 million bpd.
“The gradual increases may be paused or reversed subject to evolving market conditions,” OPEC+ noted after their virtual meeting on April 3, 2025. The eight participating countries will implement a production adjustment of 411 thousand barrels per day in May 2025 and meet on May 5 to decide on June production levels.
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