The Organisation of the Petroleum Exporting Countries (OPEC) on Monday marginally lowered its forecast for oil demand growth in 2025, citing the negative impact of U.S. trade tariffs on the global economy.
According to a Reuters report referencing OPEC’s April Monthly Oil Market Report, the organisation now expects global oil demand to rise by 1.3 million barrels per day (bpd) in 2025—down from its previous forecast of 1.4 million bpd. Both projections mark a 150,000 bpd decrease compared to the figures released last month.
OPEC also reported that the price of its reference basket of twelve crude oils had dropped to $66.25 a barrel on Monday, down from $70.85 the previous Friday.
The latest revision reflects concerns over global economic stability, particularly following trade tensions stoked by U.S. President Donald Trump’s wide-reaching tariff regime, which has affected Nigerian exports and those of several other countries. Though the policy has been temporarily suspended for 90 days, it has already triggered a ripple effect through international markets.
The tariff, OPEC noted, 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.”
As a result, OPEC downgraded its world economic growth forecast for 2024 to 3.0 per cent, down from 3.1 per cent, and reduced its 2025 outlook to 3.1 per cent, previously estimated at 3.2 per cent.
“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,” the report stated.
Despite these concerns, oil prices held onto early gains after the report was published, with Brent crude trading near $66 per barrel following U.S. tariff exemptions. Nevertheless, prices have dropped more than 10 per cent so far this month.
Although OPEC has slightly reduced its forecasts, its outlook remains more optimistic than some other major industry players. While OPEC continues to anticipate increasing oil demand for years to come, the International Energy Agency (IEA) maintains that global oil consumption could peak before 2030 due to the shift toward cleaner energy sources. The IEA is expected to release updated forecasts on Tuesday.
In terms of production, OPEC+—which includes OPEC and allied producers like Russia—reported a collective drop of 37,000 bpd in March output, bringing total production to 41.02 million bpd. The reduction was driven largely by Nigeria and Iraq.
Despite these cuts, Kazakhstan once again exceeded its agreed output quota. In March, the Central Asian country’s production rose by 37,000 bpd to 1.852 million bpd, surpassing its OPEC+ quota of 1.468 million bpd.
The Kazakh Energy Ministry acknowledged the breach last Thursday, saying the country would “fulfil its commitments in April and partially compensate for earlier overproduction,” according to Interfax news agency. A Reuters source also noted that while Kazakhstan’s output had fallen in the first half of April, it remained above the agreed cap.
The production development comes on the heels of a virtual meeting held on April 3, 2025, where eight OPEC+ nations—Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman—reviewed global market conditions and agreed to begin gradually phasing out additional voluntary cuts made in April and November 2023.
As part of this plan, the countries will collectively increase production by 411,000 bpd in May 2025, equivalent to three months’ worth of planned increments.
“The gradual increases may be paused or reversed subject to evolving market conditions,” OPEC+ stated after the meeting.
The group added that this approach would allow member countries to “accelerate their compensation” for prior overproduction or shortfalls.
OPEC+ is set to reconvene on May 5, 2025, to determine production levels for June.
