The Organization of the Petroleum Exporting Countries (OPEC) has revised its global oil demand growth forecast for 2025, citing mounting trade tensions fueled by U.S. tariffs and increased market volatility.
In its April Monthly Oil Market Report, OPEC adjusted its demand growth estimate down to 1.3 million barrels per day (bpd), a slight reduction from its previous projection of 1.4 million bpd. Both figures reflect a 150,000 bpd cut from last month’s outlook, underscoring growing concerns over the impact of U.S. trade policies on global economic activity.
The report comes as oil prices continue to dip, with OPEC’s reference basket price falling to $66.25 per barrel, down from $70.85 just days earlier. The dip has been attributed to uncertainty over trade dynamics and planned increases in production by OPEC and its allies under the OPEC+ framework.
Tariffs Add Pressure to Global Outlook
The shift in OPEC’s forecast follows new U.S. tariffs implemented by President Donald Trump, which have sparked a wave of retaliatory measures and cast a shadow over international trade. Although the tariff policy was recently suspended for 90 days, it has already contributed to rising consumer prices, weakened manufacturing activity, and disrupted global supply chains.
The ripple effect of these measures is now being reflected in OPEC’s broader economic outlook. The group revised its 2025 global economic growth forecast to 3.1%, down from 3.2%, while this year’s forecast has been lowered to 3.0% from 3.1%.
“While the year began on a relatively stable economic footing, recent trade developments have introduced a greater level of uncertainty,” the report stated, cautioning that further escalation could dampen oil demand and economic growth.
Production Trends and Outlook
Despite lower demand expectations, OPEC+—which includes non-OPEC partners such as Russia—plans to continue easing production cuts introduced in prior months. In March, collective output from OPEC+ fell by 37,000 bpd to 41.02 million bpd, largely due to decreased output from Nigeria and Iraq.
However, not all members adhered to their agreed production caps. Kazakhstan, for example, increased output by 37,000 bpd in March to 1.852 million bpd, exceeding its quota of 1.468 million bpd. The country’s energy ministry has pledged to comply with its production targets in April and compensate for previous overproduction.
Looking ahead, eight core OPEC+ members—including Saudi Arabia, Russia, and the UAE—are set to implement a 411,000 bpd production adjustment in May 2025. This step, which combines three scheduled monthly increases into one, may be reassessed depending on evolving market conditions.
OPEC maintains a more optimistic long-term view on oil consumption than some other institutions. While the International Energy Agency (IEA) expects global oil demand to peak later this decade due to the transition to renewable energy, OPEC believes consumption will continue to rise for years to come.
The IEA is expected to release its updated forecast on Tuesday, which could offer further insights into how the energy sector is responding to geopolitical and economic disruptions.
