Softer demand outlook to weigh on oil, OPEC+ walks a tightrope: Reuters ballot

By Sherin Elizabeth Varghese and Noel John

(Reuters) – Oil costs are set to stay beneath strain in 2025 as U.S. tariffs and slowing financial progress in India and China weigh on demand, whereas OPEC+ pushes ahead with plans to extend output, a Reuters ballot confirmed.

A survey of 49 economists and analysts in March forecasts Brent crude will common $72.94 per barrel in 2025, down from February’s estimate of $74.63. U.S. crude is predicted to common $69.16 per barrel, barely decrease than final month’s $70.66 outlook.

With international crude balances anticipated to widen by 300,000 barrels per day (bpd) this yr, the market is teetering on the sting of surplus, mentioned Florian Grunberger, senior analyst at Kpler.

“This shift is pushed by a weaker macroeconomic outlook in China and underperformance in Indian demand, which greater than offset a modest enchancment in European demand.”

The Group of the Petroleum Exporting Nations (OPEC) this month forecast international oil demand to rise by 1.45 million barrels per day (bpd) in 2025 and 1.43 million bpd in 2026. Nevertheless, analysts warning that U.S. President Donald Trump’s tariff plans might derail this trajectory, as they might set off financial slowdowns and drive up international inflation.

Since returning to workplace in January, Trump has reinstated a “most strain” marketing campaign on Iran to chop its oil exports to zero, and introduced a 25% tariff on any nation shopping for oil or gasoline from Venezuela. In the meantime, ongoing peace talks between Russia and Ukraine might culminate within the lifting of U.S. sanctions on Russia in some unspecified time in the future, analysts say.

“Extra U.S. sanctions in opposition to producers like Iran and Venezuela might result in a smaller world oil provide and better costs,” however a comeback of Russian oil to the markets might weigh on costs, mentioned Frank Schallenberger, head of commodity analysis at LBBW.

Analysts broadly count on OPEC+, which incorporates OPEC members plus Russia and different allies, to stay versatile with manufacturing will increase. The group will doubtless follow its plan to spice up oil manufacturing for a second consecutive month in Could, 4 sources advised Reuters.

“We don’t assume that OPEC+ will enhance provide materially this yr however will as a substitute try and push oil costs greater by letting demand outstrip provide over the past three quarters of the yr,” mentioned John Paisie, president of Stratas Advisors.

(Reporting by Sherin Elizabeth Varghese and Noel John in Bengaluru; Modifying by Kavya Balaraman and David Evans)