OPEC Maintains Its Oil Consumption Expectations for 2025 and 2026
The Organization of the Petroleum Exporting Countries (OPEC) has decided to reaffirm its forecast for sustained growth in global oil demand for 2025, highlighting that both air and land transportation will drive consumption, and noting that they do not anticipate potential trade tariffs to negatively impact economic growth. According to a recent report, global oil demand is expected to increase by 1.45 million barrels per day (bpd) in 2025 and by 1.43 million bpd in 2026, figures that remain unchanged from last month.
OPEC's perspective on demand is at the higher end of projections, and it estimates that consumption will continue to rise. This contrasts with the International Energy Agency (IEA), which predicts that demand will peak in this decade due to a shift towards more environmentally friendly fuels. In its report, OPEC mentioned that President Donald Trump's trade policy has created uncertainty in the markets, causing imbalances between supply and demand that do not reflect the real fundamentals, although it did not change its economic growth forecast for 2025. "It’s a puzzle how and to what extent potential tariffs and other policy measures will be implemented," OPEC stated in the report. "So far, they are not expected to significantly affect the underlying growth projections." Following the release of OPEC's report, the oil market remained stable, with Brent crude LCOc1 experiencing a slight dip towards $76 per barrel. The IEA, for its part, anticipates a demand growth of 1.05 million bpd in 2025, a figure that is lower than OPEC's, although the discrepancy between the two has notably decreased compared to 2024, when differences regarding the pace of the energy transition reached a historical level. OPEC+, which includes OPEC and allies like Russia, has been implementing production cuts since late 2022 in order to stabilize the market. Its current strategy involves a gradual increase in oil production starting in April.
Final Comment: It is interesting to see how the differing demand projections between OPEC and the IEA not only reflect divergent perspectives on oil consumption but also on the impact of trade policies and changes in the global energy landscape. These factors are crucial for understanding market dynamics and how political decisions can influence oil prices, a commodity that remains vital for economies worldwide.
