OPEC Cuts Oil Demand Growth Outlook Amid Tariff-Related Uncertainties

01:09 PM EDT, 04/14/2025 (MT Newswires) -- The Organization of the Petroleum Exporting Countries on Monday lowered its global oil demand projections for 2025 and 2026 amid macroeconomic uncertainties tied to the US government's tariffs.

The cartel now expects oil demand to grow by 1.30 million barrels a day this year and by 1.28 million barrels in 2026, down from its prior outlooks of 1.45 million barrels and 1.43 million barrels, respectively. The latest projections reflect first-quarter data and the expected impact of new trade tariffs announced by the Trump administration, the OPEC said in its latest monthly report.

West Texas Intermediate crude oil was down 0.9% at $60.97 a barrel in Monday midday trade, while Brent fell 0.7% to $64.30. Both WTI and Brent posted losses in the last two weeks.

President Donald Trump exempted smartphones, computers and semiconductors from his reciprocal tariffs, CNBC reported, citing Customs and Border Protection guidance issued late Friday. However, Trump said in a social media post Sunday that there are no tariff exceptions. Last week, Trump announced a 90-day pause for certain tariffs for non-retaliating countries, while hiking duties on China to 145%.

Oil consumption this year is anticipated to be supported by robust demand for air travel and "healthy road mobility, including on-road diesel and trucking," the OPEC said. In countries outside of the Organization for Economic Cooperation and Development, industrial, construction and agricultural activities are expected to contribute to demand gains, along with capacity additions and petrochemical margins mainly in China and the Middle East, the report showed.

The OPEC lowered its world economic growth forecast to 3% from 3.1% for 2025 and to 3.1% from 3.2% for next year amid higher uncertainty caused by recent tariff-related dynamics. Gross domestic product growth projections for the US were revised down to 2.1% from 2.4% for this year and to 2.2% from 2.3% for 2026.

"The US economy showed underlying strength in late 2024," the cartel wrote. "However, the outlook has shifted amid rising uncertainty, particularly related to trade dynamics." The ongoing financial market volatility is likely to have a negative impact on consumer spending in the near term, while the risk of a prolonged trade war with China "remains elevated," according to the OPEC.

Inflationary pressures are likely to resume globally following "months of moderation" amid increasing rising input costs due to tariffs and potential price hikes by retailers and producers, the cartel said. However, with monetary easing on pause across major economies, the OPEC expects inflation to remain "manageable" this year.

The cartel now expects liquid supply from countries not participating in the Declaration of Cooperation, or DoC, to grow by 0.91 million barrels a day this year and by 0.90 million barrels in 2026, down from its previous expectations of 1.01 million and 1 million barrels, respectively. The DoC is the name for OPEC+, which comprises OPEC and non-OPEC allies.

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