OPEC Lowers Global Oil Demand Growth Forecast, Highlights Risks of Trump's Tariff Policy

On Monday local time, OPEC revised down its global oil demand growth forecast for 2025 for the first time since December last year, citing risks to the global economy posed by a series of tariff policies announced by the US.

In its latest monthly report, OPEC projected that global oil demand would increase by 1.3 million barrels per day in 2025, a reduction of 150,000 barrels per day from last month's forecast. OPEC also lowered its demand growth expectation for next year from 1.43 million barrels per day to 1.28 million barrels per day.

The tariff policies of former US President Trump, along with OPEC+ alliance's plan to increase oil production, exerted significant downward pressure on oil prices this month and raised concerns about an economic recession.

Due to the downward revision of oil demand growth forecasts, OPEC also correspondingly lowered its global economic growth forecasts for this year and next. OPEC reduced its global economic growth expectation for this year from 3.1% to 3.0%, and for next year from 3.2% to 3.1%.

Last month, OPEC stated that trade war concerns would exacerbate market volatility but maintained its expectations unchanged, asserting that the global economy would adjust.

In the latest report, OPEC noted, "The global economy showed steady growth at the beginning of the year, however, recent trade-related developments have brought higher uncertainty to the short-term global economic growth outlook."

Nevertheless, OPEC's view on oil demand remains at the higher end of industry forecasts and expects oil consumption to continue rising in the coming years. The International Energy Agency (IEA), on the other hand, believes that oil demand will peak this decade as the world shifts to cleaner fuels.

OPEC's report also revealed that OPEC+ crude oil production fell by 37,000 barrels per day in March to 41.02 million barrels per day due to production cuts in Nigeria and Iraq.

OPEC plans to increase production in April and May, which is part of the gradual unwinding of the 2.2 million barrels per day production cut plan. The broader OPEC+ alliance also has a production cut agreement of approximately 3.66 million barrels per day, which will last until the end of 2026.

Despite the global oil market remaining fragile against the backdrop of escalating trade tensions, and many OPEC+ members needing higher oil prices to balance their national budgets, the organization also faces pressure from the Trump administration to lower oil prices.

However, Saudi Arabia continues to push OPEC and its allies to accelerate production increase plans, a strategy aimed at further reducing crude oil prices by increasing supply, thereby exerting pressure on member countries that do not comply with production quotas.

The report also showed that Kazakhstan, which has consistently exceeded OPEC+ production targets, further increased production by 37,000 barrels per day in March, once again violating the limits. Informed sources indicated that Kazakhstan seems to have made little progress in complying with the agreement this month.