OPEC Slashes Oil Demand Outlook as Trump Tariffs Change Global Trade
OPEC announced Monday a significant reduction in its oil demand growth forecasts for 2025 and 2026, citing the impact of President Donald Trump’s sweeping tariffs.
The organization now expects global oil demand to increase by 1.3 million barrels per day (bpd) in 2025 and 1.28 million bpd in 2026, both down 150,000 bpd from previous estimates.
The revised forecast reflects mounting concerns about global economic health amid escalating trade tensions. OPEC simultaneously lowered its world economic growth projections to 3.0% for 2025 and 3.1% for 2026, each reduced by 0.1 percentage points.
Trump’s tariffs, including a massive 145% duty on Chinese imports, have sent shockwaves through commodity markets. Oil prices have plummeted approximately 13% since the April 2 “Liberation Day” tariff announcement, though they recovered slightly Monday with Brent crude trading near $66 per barrel.
OPEC’s demand outlook remains notably more optimistic than competitors. Goldman Sachs recently slashed its 2025 forecast to just 300,000 bpd, while Morgan Stanley halved its second-half projection to 500,000 bpd.
The organization also reduced its non-OPEC+ supply growth forecast by 100,000 bpd for both years. US production growth estimates dropped to 400,000 bpd for 2025 and 380,000 bpd for 2026.
Meanwhile, OPEC+ crude production fell by 37,000 bpd in March to 41.02 million bpd. Kazakhstan continues to flout production limits, pumping 1.852 million bpd against its 1.468 million bpd quota.
Despite weakening demand forecasts, OPEC+ plans to increase production in April and May. This strategy aims to stabilize markets but risks further price pressure as global trade uncertainties persist.
The International Energy Agency will release its competing oil demand forecast tomorrow.
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