By Giulia Petroni
The Organization of the Petroleum Exporting Countries cut its forecast for oil demand growth just days after a surprise decision to boost output, citing the impact of U.S. tariffs on the global economy and crude consumption.
The Vienna-based cartel now expects demand to rise by 1.3 million barrels a day this year and 1.28 million barrels a day the next, compared with previous projections of 1.45 million barrels and 1.43 million barrels a day, respectively.
"Oil demand is forecast to be supported by strong air travel demand and healthy road mobility," it said on Monday. "However, this forecast is subject to uncertainties surrounding global economic developments amid the new trade tariffs announced by the U.S."
In midday trading in Europe, Brent crude, the international energy benchmark, was around $65 a barrel, while the U.S. oil gauge West Texas Intermediate traded around $62 a barrel.
Oil prices plummeted to a four-year low last week as fears of a tariff-induced recession swept through global markets, triggering a broad selloff in risk assets and raising concerns over the crude demand outlook.
Meanwhile, OPEC and its allies--which pump more than half of the world's crude oil--unexpectedly decided to increase supply by 411,000 barrels a day in May, the equivalent of three monthly hikes under its previous plans. The move further dragged on tariff-hit crude prices, fueling worries over a global supply surplus.
The cartel's oil demand forecast remains notably more optimistic than others in the industry, with the International Energy Agency currently estimating this year's growth at 1.03 million barrels a day.
U.S. President Trump's sweeping tariff policies are also weighing on the global economy, prompting OPEC to revise its growth forecast for this year and next to 3% and 3.1%, down from previous projections of 3.1% and 3.2%.
"Global economic growth began in 2025 with strong fundamentals and resilience across major economies," the cartel said. "However, recent developments in global trade relations have shifted the outlook and introduced new uncertainties amid a rising escalation in tariffs between the U.S. and China."
Economic growth in the U.S. is now seen at 2.1% in 2025 from 2.4% previously, and at 2.2% in 2026. The eurozone's economy is forecast to grow by 0.8% and 1.1% in the same periods.
In March, overall OPEC crude-oil production dipped by 78,000 barrels a day to 26.78 million barrels a day. The total production of countries participating in the Declaration of Cooperation--or DoC, the cartel's formal name for OPEC+--fell by 37,000 barrels a day to 41.02 million barrels a day last month.
However, OPEC and its allies have been struggling with compliance issues as countries like Kazakhstan and the UAE have repeatedly failed to meet their production targets. Kazakhstan output rose by 37,000 barrels a day to 1.85 million barrels a day last month.
OPEC also revised its forecast for supply growth from countries not participating in the DoC, lowering its estimates to 900,000 million barrels a day for both 2025 and 2026, saying the U.S., Brazil, Canada and Argentina are expected to drive the increase.
Write to Giulia Petroni at giulia.petroni@wsj.com
(END) Dow Jones Newswires
April 14, 2025 08:14 ET (12:14 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
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