OPEC cut forecasts for global oil demand growth slightly this year and next as President Donald Trump's tariff onslaught takes a toll on consumption, while remaining more bullish than other forecasters.

The cartel lowered demand growth projections for 2025 and 2026 by about 100,000 barrels a day, projecting an expansion of 1.3 million barrels a day — or approximately 1% — for each year, according to a report from its secretariat in Vienna.

Despite the downgrades, the estimates from OPEC remain considerably higher than many others in the industry — a recurring feature of its research. The US government's Energy Information Administration slashed its 2025 growth figure by 30% last week to 900,000 barrels a day, while Goldman Sachs Group Inc. anticipates sees consumption rising by 500,000 barrels a day.

OPEC leader Saudi Arabia has made surprising use of the market slump, steering the group and its allies to accelerate planned production increases in an effort to sink crude prices and make wayward members abide by their output quotas. Oil futures are trading near $65 a barrel in London after plunging to a four-year low last week.  

The report published on Monday helps explain the source of Riyadh's ire.

Kazakhstan, despite saying it had held talks with international oil companies to rein in supplies, increased production once again. Its output rose 37,000 barrels a day last month to an average of 1.852 million barrels a day. That's 422,000 barrels a day more than the level it had pledged to pump, both exceeding its quota and failing to make compensation cuts that were supposed to start offsetting months of cheating.

Astana still appears to have made little headway in complying this month, people familiar with the matter said last week.

The Organization of the Petroleum Exporting Countries has misfired in its demand projections in recent years, having launched an outlook for 2024 that was more bullish than the wider industry, only to slash the projection by 32% over the course of six consecutive monthly downgrades.

The International Energy Agency, which publishes forecasts that are more closely watched by oil traders than those of OPEC, will release its latest updates on Tuesday.

Source: Bloomberg