OPEC kept its forecast for strong growth in global oil demand in 2025 unchanged on Wednesday, noting that air and road travel would support consumption. In its latest monthly report, the Organization of the Petroleum Exporting Countries said that world oil demand will rise by 1.45 million barrels per day in 2025 and by 1.43 million barrels per day in 2026.
OPEC’s outlook on oil demand remains higher than industry forecasts. For instance, the International Energy Agency (IEA) sees 2025 demand growth at 1.05 million barrels per day, lower than OPEC. However, the gap between the two in 2025 is much smaller than it was for 2024 when the split reached a record high driven by differences over the pace of the energy transition.
In addition, OPEC expects oil use to keep rising in coming years but the IEA sees demand peaking this decade as the world switches to cleaner fuels.
U.S. trade tariffs increase uncertainty
Following the latest economic growth figures and output indicators, economic growth in 2025 and 2026 is anticipated to remain well supported, although uncertainties remain. Ongoing steady growth in the United States and China supports this expectation. With India, Brazil and Russia also sustaining strong growth trends, the solid momentum in global economic growth observed in the second half of 2024 is forecast to continue in 2025.
“Recent U.S.-centred trade-related negotiations have introduced some uncertainty in the global economic growth dynamic. That said, given that a relatively swift, albeit temporary, resolution of most issues occurred, the impact is currently expected to be limited,” said OPEC.
OPEC added that it remains to be seen how and to what extent potential tariffs and other policy measures will play out. So far, they are not anticipated to materially impact the current underlying growth assumptions. However, the impact of potential tariffs and other policy measures remains uncertain, both in terms of their scope and significance, the report added.
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OPEC+ to start unwinding production cuts in April
Earlier this month, OPEC+ decided to maintain its policy of gradually increasing oil output starting in April. Additionally, the group has excluded the U.S. government’s EIA from the sources used to monitor its production and adherence to supply agreements.
OPEC+ has had a tumultuous relationship with Donald Trump during his first term from 2016 to 2020. The U.S. President frequently urged the organization to raise production levels to offset the decline in Iranian supply caused by U.S. sanctions.
Since returning to the White House, Trump has once again called on OPEC to release more oil to reduce prices, arguing that high prices have allowed Russia to sustain its war efforts in Ukraine.
OPEC and its allies are currently cutting output by 5.85 million barrels per day, which equates to approximately 5.7 percent of global supply. This decision has been part of a series of measures implemented since 2022. In December, OPEC+ extended its latest round of cuts through the first quarter of 2025, delaying the initial plan to start raising output until April due to weak demand and increasing supply from outside the group.
According to the existing plan, the gradual unwinding of the 2.2 million barrels per day of cuts will begin in April. These increases are expected to continue until September 2026.
