ABUJA, Nigeria (VOICE OF NAIJA)- The Organisation of the Petroleum Exporting Countries (OPEC) has slightly lowered its oil demand growth projection, citing the dampening effects of U.S. tariffs on the global economy.
According to a Reuters report referencing the OPEC Monthly Oil Market Report for April, the group now expects oil demand to grow by 1.3 million barrels per day (bpd) in 2025, down from its previous estimate of 1.4 million bpd.
Both figures represent a 150,000 bpd decline from last month’s forecast.
OPEC’s reference basket of twelve crudes saw a drop in price to $66.25 per barrel on Monday, down from $70.85 recorded the previous Friday, based on calculations by the OPEC Secretariat.
U.S. President Donald Trump’s trade tariffs, combined with plans for increased production by OPEC+, which includes Russia and other non-member allies, have exerted downward pressure on oil prices and heightened fears about a global economic slowdown.
Trump’s recent imposition of broad tariffs on exports from Nigeria and other nations though currently suspended for 90 days has sparked trade tensions, increased consumer costs, and disrupted manufacturing and international trade.
OPEC also revised its global economic growth outlook downward in the report, projecting growth of 3.0 per cent for 2024, down from an earlier 3.1 per cent, and 3.1 per cent for 2025, compared to a prior forecast of 3.2 per cent.
“The global economy showed a steady growth trend at the beginning of the year; however, recent trade-related dynamics have introduced higher uncertainty to the short-term global economic growth outlook,” the organisation noted in its latest report.
Following the release of the report, oil prices held on to earlier gains, with Brent crude trading close to $66 a barrel after the U.S. granted certain tariff exclusions.
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Despite this, oil prices have dropped over 10 per cent this month.
OPEC’s oil demand outlook remains one of the more optimistic among industry projections.
The organisation still anticipates long-term growth in oil consumption, contrasting with the International Energy Agency’s (IEA) outlook that sees demand peaking later this decade amid the shift to cleaner energy sources.
The IEA is expected to release updated forecasts on Tuesday.
In terms of production, OPEC+ output declined by 37,000 bpd in March to 41.02 million bpd, partly due to cuts from Nigeria and Iraq.
The group is preparing to increase output in April and again in May, as part of a strategy to gradually unwind earlier cuts implemented to stabilise the market.
However, Kazakhstan continued to exceed its OPEC+ quota, raising its production by 37,000 bpd in March to 1.852 million bpd well above its cap of 1.468 million bpd for the first quarter of the year.
The country’s energy ministry acknowledged the breach, saying it plans to honour its commitments in April and will partially compensate for earlier overproduction,according to Interfax news agency.
A source within the industry informed Reuters on Monday that Kazakhstan’s oil production declined during the first two weeks of April compared to its March average, though it still remained above the OPEC+ quota.
This update follows a virtual meeting held on 3 April 2025 by eight OPEC+ countries Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman who had previously announced additional voluntary adjustments in April and November 2023.
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The meeting focused on assessing current global market conditions and future outlooks.
As a result of the meeting, the eight participating nations agreed to implement a production adjustment of 411 thousand barrels per day in May 2025.
This figure represents three monthly increments, including the one initially scheduled for May and two additional ones.
“The gradual increases may be paused or reversed subject to evolving market conditions,” OPEC+ stated in a post-meeting note.
The countries also emphasized that this approach would create an opportunity for participating members to accelerate their compensation efforts.
A follow-up meeting is scheduled for 5 May to determine production levels for June.