By: AGBI

Opec on Monday lowered its 2025 forecast for global oil demand growth, warning that rising trade tensions and weaker economic activity are likely to weigh on consumption.

Opec, the oil exporters’ group of which Saudi Arabia is the largest producer, expects demand to grow by 1.3 million barrels per day (bpd) this year, down from its previous forecast of 1.4 million bpd.

“The global economy showed a steady growth trend at the beginning of the year,” Opec said in its monthly report. “However, the near-term trajectory is now subject to higher uncertainty given the recent tariff-related dynamics.

” The downgrade follows US President Donald Trump’s announcement earlier this month of tariffs on a wide range of US imports, increasing global trade tensions.

US tariffs on China soared to 145 percent. Trade between the world’s two largest economies is worth more than $500 billion a year.

Opec’s forecast is more optimistic than that of the International Energy Agency, which last month projected demand would grow by just 1 million bpd in 2025.

Opec also revised its global economic outlook, trimming 2025 gross domestic product growth to 3 percent and 3.1 percent for 2026.

China’s growth forecast was cut to 4.6 percent for 2025 and 4.5 percent for 2026, while US growth was revised to 2.1 percent and 2.2 percent respectively.

On April 3, Opec said it would begin unwinding some of its voluntary production cuts in May, adding 411,000 bpd back to the market – three times more than previously planned. 

The announcement, coming a day after Trump’s April 2 tariff announcement, contributed to a sell-off in crude. The Brent crude benchmark has dropped more than 14 percent since April 2.

Analysts at S&P Global and other companies have cut 2025 global oil demand growth forecast by as much as 40 percent to 700,00 bpd.

On Monday, Brent edged up to $65.64 a barrel at 16:36 GST and WTI traded at $62.41.