OPEC Lowers Demand Forecast Amid U.S. Tariffs: OPEC revised its global oil demand growth forecast for 2025, reducing it by 150,000 barrels per day to 1.30 million bpd. This adjustment marks the first downward revision since December and is attributed to weaker-than-expected first-quarter data and the adverse effects of new U.S. trade tariffs. The organization also slightly lowered its global economic growth forecasts, reflecting increased uncertainty due to escalating trade tensions. Despite a 10% drop in oil prices so far this month, OPEC maintains a relatively optimistic long-term demand outlook. However, the group is gradually increasing output as part of a phased rollback of earlier production cuts, with Kazakhstan exceeding its OPEC+ production quota again in March. 

Goldman Sachs Predicts Decline in Oil Prices Through 2026: Goldman Sachs forecasts a decline in global oil prices through the end of 2026, citing increased supply from OPEC+ and heightened recession risks stemming from a global trade war, particularly between the U.S. and China. The investment bank projects West Texas Intermediate (WTI) crude to drop from $59 in 2025 to $55 in 2026. Ongoing geopolitical tensions and reduced global demand growth have led Goldman Sachs to cut its global oil demand growth forecast for the fourth quarter of 2026 by 900,000 bpd. Recent retaliatory tariffs imposed by China, reaching up to 125% on U.S. goods, have exacerbated the trade conflict and could disrupt global supply chains. Despite the oil market already pricing in future inventory builds, Goldman projects surpluses of 800,000 bpd in 2025 and 1.4 million bpd in 2026, which will continue to pressure prices. 

Kazakhstan's Oil Output Remains Above OPEC+ Quota: In early April 2025, Kazakhstan's crude oil production decreased by 3% compared to March, averaging around 1.82 million barrels per day (bpd), primarily due to lower output at the Chevron-led Tengiz oilfield. Despite the decline, production remains above the country's April OPEC+ quota of 1.473 million bpd. Kazakhstan has repeatedly exceeded its OPEC+ commitments, prompting complaints from other alliance members. The energy ministry claimed the country would honor its obligations in April and partly offset prior overproduction. Meanwhile, Kazakhstan faces export challenges due to disruptions along the Caspian Pipeline Consortium (CPC) route, which transports oil to Russia's Black Sea port of Novorossiisk.

Market Overview: WTI crude oil prices have risen so far today. This increase is attributed to the U.S. granting exclusions on certain tariffs and a significant rebound in China's crude oil imports in March, indicating potential strengthening in global demand. However, gains are tempered by ongoing concerns over the U.S.-China trade war, which could impede global economic growth and fuel demand. OPEC's recent downward revision of global oil demand growth forecasts for 2025 and 2026, citing weaker-than-expected first-quarter data and the impact of new U.S. tariffs, adds to market caution. Despite these concerns, the market's response to positive import data from China suggests a nuanced outlook, balancing demand optimism against geopolitical uncertainties. Additionally, BP's announcement of a new oil discovery in the U.S. Gulf of Mexico has bolstered investor confidence, contributing to the upward price movement. Overall, while the market faces headwinds from trade tensions and revised demand forecasts, today's price increase reflects a cautiously optimistic sentiment driven by positive supply and demand.

Crude Movement Since January 20th

In 2024, U.S. crude oil exports reached a record high, averaging over 4.1 million barrels per day, though year-over-year growth slowed to just 1%. Record production in the lower 48 states, driven by improved efficiency despite fewer active rigs, supported the increased export volume. In contrast, production in Alaska and the Gulf of Mexico declined due to natural declines and hurricane-related disruptions. Europe and the Asia-Oceania region remained the leading destinations for U.S. crude exports. Export growth to Europe surged following its 2022 ban on Russian seaborne crude and the 2023 inclusion of WTI in the Dated Brent benchmark.

Oil prices rose slightly on Monday, buoyed by a rebound in China’s crude imports and U.S. tariff exemptions for electronics, though gains were limited by ongoing trade war concerns. China’s March crude imports surged nearly 5% year-over-year, aided by Iranian and Russian deliveries. The trade dispute between the U.S. and China has led analysts to lower oil price forecasts due to concerns about global economic growth and weakening fuel demand. OPEC cut its 2025 global oil demand forecast, while banks like Goldman Sachs, UBS, and JPMorgan also reduced their price expectations amid rising OPEC+ production and slowing petrochemical demand. Meanwhile, the Keystone pipeline is set for a controlled restart after a recent leak disrupted crude flows between Canada and the U.S.