OPEC trims forecast for global oil demand growth on Trump tariffs impact

The Organization of the Petroleum Exporting Countries lowered its forecast for growth in global oil demand in 2025 for the first time since December. 

OPEC said in its April Oil Market Report:

This minor adjustment is mainly due to received data for 1Q25 and the expected impact on oil demand given recently announced US tariffs.

The new forecast predicts an increase of 1.30 million barrels per day in 2025 and 1.28 million bpd in 2026, down 150,000 bpd from the previous month’s estimates for both years.

Oil demand in the Organization for Economic Cooperation and Development countries is expected to grow by just 100,000 bpd on a year-on-year basis in 2026, the cartel said. 

In non-OECD countries, demand is expected to grow by 1.2 million bpd this year. 

Oil prices have fallen this month due to concerns about economic growth and the pressure from US President Donald Trump’s trade tariffs and OPEC+’s plan to increase output.

Global growth and oil prices

OPEC has lowered its forecast for world economic growth this year from 3.1% to 3.0%, and next year’s forecast from 3.2% to 3.1%. 

Despite stating last month that trade concerns would contribute to volatility, OPEC had kept its 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 the report.

Oil prices held onto some of the gains from earlier on Monday’s session after the release of the OPEC report, with Brent crude trading near $65 a barrel following US exclusions on some tariffs.

However, prices have still dropped over 10% so far this month.

OPEC’s oil demand view remains at the higher end of industry forecasts, with expectations that oil use will continue to rise for years. 

This contrasts with the International Energy Agency’s view, which predicts that demand will peak this decade as the world transitions to cleaner fuels.

The Paris-based energy watchdog also forecasts that global oil demand is likely to rise by a little over 1 million bpd this year. 

The IEA will provide an update to its oil demand forecasts on Tuesday.

March production 

According to OPEC’s report, Saudi Arabia, the de facto leader of the group, produced 8.964 million bpd of oil in March, just 4,000 bpd higher than the previous month. 

Most other prominent permanent OPEC member countries produced less oil in March.

Iraq’s production fell by 34,000 bpd to below 3.981 million bpd last month. 

Iran’s output increased by 12,000 bpd to 3.335 million bpd in March, according to secondary sources quoted in OPEC’s report. 

Meanwhile, Russia, the biggest ally member in the OPEC+ group, produced 8.963 million bpd of oil in March, down just 10,000 bpd from February. 

Russia is the second-largest exporter of crude oil in the world after Saudi Arabia. 

Eight members of OPEC+, including Saudi Arabia and Russia, are scheduled to unwind some of their voluntary production cuts of 2.2 million bpd and raise output by 135,000 bpd this month. 

In May, these eight members from the broader OPEC+ alliance decided to further increase output by 411,000 bpd. 

The wider OPEC+’s crude production decreased by 37,000 bpd to 41.02 million bpd in March, partly due to Nigeria and Iraq’s output reductions, OPEC’s report also showed.

Kazakhstan’s output rises again

The report also showed that Kazakhstan’s production rose by 37,000 bpd in March, exceeding its OPEC+ output target once more. 

The increase occurred before the scheduled hikes, as indicated in the report, and shows the country has consistently surpassed its output restrictions.

Production in the Central Asian country climbed to 1.852 million barrels per day last month, exceeding its OPEC+ quota of 1.468 million bpd for January-March.

Kazakhstan exceeded its OPEC+ quota in March, but will fulfill its commitments in April and partially compensate for the overproduction, the country’s energy ministry told Interfax news agency last Thursday.