The Organisation of the Petroleum Exporting Countries (OPEC) has slightly reduced its earlier forecast for global oil demand in 2025. According to its Monthly Oil Market Report released on Monday, April 8, 2025, the group now expects oil demand to grow by 1.3 million barrels per day (bpd) instead of the earlier 1.4 million bpd. This means OPEC has cut 100,000 bpd from its previous estimate, and 150,000 bpd less compared to what was predicted last month.
The latest report, as seen in a Reuters publication, shows that OPEC is worried about the current trade tensions in the global economy, especially the effect of new tariffs from the United States under President Joe Biden’s administration. Though the report refers to tariffs introduced by the U.S., it is important to note that these measures were first aggressively used during former President Donald Trump’s time, and their economic impacts are still being felt across the world.
One major effect of these trade policies is a drop in crude oil prices. The OPEC basket, which contains crude from twelve member countries, fell from $70.85 per barrel on Friday to $66.25 per barrel by Monday. This sharp drop has caused concern among oil-exporting countries, including Nigeria, which heavily relies on crude exports for national revenue.
Part of the problem is the ongoing U.S. tariffs that have affected international trade. Nigeria, along with several other countries, has seen its exports hit by these tariffs. Although the U.S. has paused the implementation for 90 days, the uncertainty is already affecting global trade, slowing down manufacturing, increasing the cost of goods and services, and reducing the standard of living in many countries.
In response to these challenges, OPEC also reduced its global economic growth forecast. The group now expects the world economy to grow by only 3.0 per cent in 2024, down from the 3.1 per cent predicted earlier. For 2025, the growth forecast has also dropped from 3.2 per cent to 3.1 per cent. OPEC explained that while the global economy showed good signs at the beginning of the year, the new trade disputes and tariffs have created more uncertainty in the short term.
Despite all this, oil prices remained slightly stable after the report was released. Brent crude was still trading around $66 per barrel, although it has dropped by over 10 per cent since the start of April. OPEC remains optimistic that oil demand will keep increasing for many more years. This position is different from the International Energy Agency (IEA), which believes that global oil demand may reach its peak within this decade as more countries move towards cleaner and renewable energy sources.
In March 2025, OPEC+—a wider group made up of OPEC members and allies like Russia—reduced crude oil production by 37,000 bpd, bringing total output to 41.02 million bpd. This reduction was partly because of lower production from Nigeria and Iraq. However, Kazakhstan, another OPEC+ member, went in the opposite direction by increasing its output by 37,000 bpd in March, producing 1.852 million bpd, well above its agreed limit of 1.468 million bpd.
Kazakhstan’s energy ministry admitted the country exceeded its target but promised to make up for the extra production by reducing output in April. An unnamed industry source also confirmed that Kazakhstan’s oil output had dropped in the first two weeks of April, though it was still higher than the allowed quota.
Meanwhile, on April 3, 2025, eight OPEC+ countries held a virtual meeting to review the oil market. The countries included Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman. After the meeting, they announced a joint plan to increase oil output by 411,000 bpd starting in May 2025. This is equal to three months’ worth of planned increases all at once. The group said the rise in output could be adjusted again depending on how the oil market behaves in the coming weeks.
The move is part of OPEC+’s ongoing efforts to balance the oil market, protect prices, and manage supply in the face of rising global uncertainty. However, with mixed signals from different countries, including overproduction from Kazakhstan, it remains to be seen how united the group will be in the months ahead.
