FILE PHOTO: People walk past an installation depicting barrel of oil with the logo of Organization of the Petroleum Exporting Countries (OPEC) during the COP29 United Nations climate change conference in Baku, Azerbaijan November 19, 2024.
Maxim Shemetov | Reuters
OPEC on Monday cut its oil demand growth forecast for 2025 and 2026 as President Donald Trump’s tariffs weigh on global economic growth.
The cartel now sees demand for crude growing by 1.3 million barrels per day this year and next year, down about 150,000 bpd from its previous estimates. OPEC also lowered its global economic growth forecast to 3% and 3.1% for 2025 and 2026, respectively, taking both estimates down 0.1 percentage point from its prior outlook.
“The global economy showed a steady growth trend at the beginning of the year,” the group said in its monthly oil market report. “However, recent trade related dynamics have introduced higher uncertainty to the short-term global economic growth outlook.”
Trump has slapped 145% tariffs on China, the world’s second-biggest economy and largest crude importer. The president has imposed 10% tariffs on most other countries during a 90-day period that allows for trade negotiations. More industry-specific tariffs on pharmaceuticals and semiconductors may be on the way.
Key members of the broader OPEC+ group have agreed to accelerate oil production starting in May even as OPEC sees slightly lower demand for crude and softer economic growth.
Trump’s trade war and the OPEC+ decision to accelerate output has weighed heavily on prices this month. Crude oil futures are down about 13% since Trump announced his sweeping tariff plan on April 2.
U.S. crude oil and global benchmark Brent were trading more than 1% higher on Monday.