OPEC has slightly lowered its forecast on Monday for global oil demand growth in 2025, citing softer-than-expected first-quarter data and potential fallout from newly announced US tariffs. The OrganiSation of the Petroleum Exporting Countries now expects oil demand to increase by 1.3 million barrels per day (mb/d) in 2025, down marginally from last month's forecast. The downgrade was attributed to the economic uncertainty driven by rising trade tensions, particularly those stemming from the US tariff actions. "The global economy showed a steady growth trend at the beginning of the year; however, the near-term trajectory is now subject to higher uncertainty given the recent tariff-related dynamics." OPEC said in its Monthly Oil Market Report (MOMR). Despite headwinds, OPEC expects oil consumption to rebound during the summer. Demand in the third quarter of 2025 is projected to rise by 1.5 mb/d year-on-year, with support from increased consumption in the transportation sector, including jet fuel and gasoline. Non-OECD regions, particularly China, India, and Other Asia, are expected to be the primary drivers of demand growth. China alone is forecast to contribute 0.3 mb/d in the third and fourth quarters. In contrast, OECD oil demand remains subdued, particularly in the Americas, where the impact of US tariffs is forecast to weigh on consumption. On the supply side, output from countries outside the OPEC+ agreement is expected to grow by 0.9 mb/d in both 2025 and 2026, driven by the US, Canada, Brazil, and Argentina. Meanwhile, crude production from OPEC+ members declined by 37,000 barrels per day in March to 41.02 mb/d, the report said citing secondary sources. Crude oil prices declined in March across all benchmarks. The OPEC Reference Basket dropped 3.7 per cent month-on-month to $74.00 per barrel. ICE Brent averaged $71.47/b and NYMEX WTI stood at $67.94/b for the month. Looking ahead, OPEC noted that speculation in oil markets is showing signs of recovery. "This reflects traders' optimism about the supply/demand balance outlook." the report said, although it warned that market sentiment remains vulnerable to geopolitical developments and trade policy shifts. Commercial oil inventories in OECD countries fell to 2,746 million barrels in February, around 173 million barrels below the 2015–2019 average. The group maintained its forecast for demand of OPEC+ crude in 2025 at 42.6 mb/d, up 0.3 mb/d from 2024 levels. However, the 2026 forecast was revised down by 0.1 mb/d to 42.8 mb/d. Attribution: Amwal Al Ghad English Download
