Global trade growth expected to slow, weigh on oil prices and exporters: IMF

Weakened expectations for global trade growth are set to weigh on oil exporters as demand flattens, the International Monetary Fund's research director Pierre-Olivier Gourinchas said April 22 in Washington DC.

Oil prices are expected to decline 15.5% in 2025, hovering around $66.9/b, and supply growth is expected to outpace "tepid demand growth" through 2026, when prices are projected to fall further settling around $62.4/b, according to the IMF's April 2025 World Economic Outlook.

"We have seen oil prices declining since our last projection, and the decline is coming from weaker global demand and weakening global activity," Gourinchas said.

He said that supply has also increased with OPEC's planned output boost, but demand factors have weighed on the outlook for oil. Fuel commodity prices are also expected to fall by 7.9% in 2025, with declines in oil and coal prices offset by a 22.8% increase in natural gas prices.

"Oil exporters are going to face lower revenues from the decline in oil prices that will weigh on outlooks for growth," he said.

Eight OPEC+ countries implementing 2.2 million b/d of voluntary cuts announced they would increase production by 411,000 b/d in May, three times the amount initially promised. The OPEC+ announcement fueled a crude selloff that started with Trump's tariff announcements in early April.

Platts-assessed Dated Brent lost almost $15/b in the first nine days of April, hitting a low on April 9 at $62.685/b before rebounding to $68.45/b on April 17, the latest Dated Brent assessment before the Easter holiday.

Sources told Platts, part of S&P Global Commodity Insights, that the move was designed to jolt overproducers into compliance with their OPEC+ quotas by taking prices below the level needed for most members to balance their national budgets.

The IMF said in its outlook that OPEC+ policy in this environment will be "pivotal."

"Upside price risks from potential disruptions in oil supply from countries subject to sanctions or a de-escalation of trade barriers are offset by the possibility of a further escalation in the trade war and additional increases in OPEC+'s production schedule," according to the 2025 outlook.

Trump's tariffs have thrown global markets into a whirlwind, and the IMF said that while global growth expectations "remain well above recession levels," the trade tensions resulting from the tariffs will "greatly impact global trade."

The IMF has slashed its global trade growth outlook in half, expecting growth at 1.7%. Previously, global trade growth was forecast at 3.8%.

The IMF also said the risk of a global recession now stands at 30%, compared to 17% in 2024.