The Organization of the Petroleum Exporting Countries (OPEC) has revised its global oil demand growth forecast downward, citing escalating global trade tensions and the adverse effects of recent U.S. tariffs. In its April 2025 Monthly Oil Market Report, OPEC announced a 100,000 barrels per day (bpd) cut in its projected oil demand growth for 2025—bringing the total to 1.3 million bpd, down from an earlier estimate of 1.4 million bpd.
This downgrade follows a similar 150,000 bpd revision from last month’s outlook, underscoring growing concerns about the global economic outlook. The OPEC basket of crude oil prices has also suffered, falling to $66.25 per barrel on Monday, compared to $70.85 the previous Friday.
Much of the concern stems from recent U.S. trade policies under President Donald Trump, who reinstated a wide-ranging tariff regime targeting exports from countries like Nigeria and several other developing economies. Although the tariffs have been temporarily suspended for 90 days, the impact on global trade has already taken root, leading to higher production costs, weakened consumer purchasing power, and disrupted supply chains.
OPEC noted in its report: “While the global economy showed a steady growth trend at the beginning of the year, recent trade-related dynamics have introduced higher uncertainty to the short-term global economic growth outlook.”
In response to the trade challenges, OPEC has also revised its global GDP growth forecast, slashing the 2025 projection to 3.0% from 3.1% and cutting the 2026 estimate to 3.1% from 3.2%.
Despite the weaker forecast, oil prices briefly held steady following news that the U.S. had exempted certain goods from the newly imposed tariffs. Brent crude hovered around $66 per barrel, though it remains over 10% lower compared to the beginning of April.
Interestingly, OPEC’s demand outlook remains more optimistic than projections by the International Energy Agency (IEA), which has signaled a possible peak in global oil demand this decade as countries transition to cleaner energy alternatives. The IEA is expected to update its forecast shortly.
Meanwhile, the broader OPEC+ coalition, which includes major producers like Russia, Iraq, and Nigeria, reported a marginal production decline of 37,000 bpd in March, bringing total output to 41.02 million bpd. Notably, reductions from Nigeria and Iraq contributed to this dip.
However, Kazakhstan continues to be a compliance outlier, having exceeded its production quota once again. In March, its output rose to 1.852 million bpd—far above the agreed limit of 1.468 million bpd. The country has promised to meet its obligations in April and compensate for prior overproduction.
Earlier this month, OPEC+ ministers from eight member countries—Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman—held a virtual meeting to reassess market conditions. The group agreed to gradually increase output by 411,000 bpd in May 2025, consolidating three months’ worth of scheduled increments. However, they left the door open to pause or reverse the increase, depending on market dynamics.
Another OPEC+ meeting is scheduled for May 5, where decisions on June production levels will be made.
While OPEC’s latest revisions highlight the growing complexity of balancing market stability with geopolitical realities, the organization maintains that oil demand will continue to rise in the coming years, even as energy transitions gain momentum.
Analysts believe OPEC’s cautious approach to production increases—combined with its willingness to adjust in real-time—reflects a broader strategy to safeguard price stability while responding to shifting global economic tides.
For Nigeria and other oil-dependent economies, the interplay between global oil demand, U.S. trade policies, and OPEC’s supply decisions will significantly impact revenue generation, budget planning, and energy sector stability in the coming months.