11:10 AM EDT, 06/16/2025 (MT Newswires) -- The Organization of the Petroleum Exporting Countries on Monday trimmed its global oil demand projections for 2025, while it maintained its world and US economic growth forecasts for this year and the next.

The oil-producing cartel now expects oil consumption to grow by 1.29 million barrels a day this year, compared with its previous forecast of 1.3 million barrels, the OPEC said in its latest monthly report.

Better-than-expected first-quarter data for Organization for Economic Co-operation and Development members in the Americas and Europe were countered by lower expectations for oil demand, particularly for the second quarter in China and India due to the likely impact of US trade policy, the OPEC said.

Robust air travel and road mobility are among factors that should provide a boost to oil consumption in 2025, according to the OPEC report.

The organization continues to estimate oil demand to rise by 1.28 million barrels a day in 2026.

West Texas Intermediate crude oil was down 3.5% to $68.76 a barrel in Monday trade, while Brent declined 3.6% to $71.55. Oil prices jumped on Friday after Israel's attack on Iran, which responded with its own retaliation.

The OPEC reiterated its world economic growth estimates of 2.9% and 3.1% for 2025 and 2026, respectively. Expansion projections for the US were held steady at 1.7% for this year and 2.1% the next, according to the cartel.

"Early indicators suggest a rebound in the US economy following the trade-related disruptions and import surge driven by front-loading ahead of tariff implementation, which weighed on (first-quarter) growth," the OPEC said. "The expected normalization of trade patterns amid ongoing negotiations is likely to support growth in (the second quarter).

The European Union is ready to accept a 10% tariff rate on all of its exports to the US to avoid higher duties on vehicles, drugs and electronics, Reuters reported Monday, citing German newspaper Handelsblatt.

Last week, the US and China agreed on a framework for implementing a pact the two countries reached in Switzerland last month. US President Donald Trump said at the time that China will supply rare earths upfront as part of a trade agreement that is subject to his approval and that of his Chinese counterpart, Xi Jinping.

Higher input and import costs are likely to impact global inflation dynamics, although the broader trend of moderating headline inflation eases some concern, according to the OPEC, which expects the Federal Reserve to resume rate cuts in the second half of 2025.

The Fed is scheduled to announce its monetary policy decision later in the week, with markets widely expecting the central bank to hold the benchmark lending rate steady. Last week, government data showed that consumer inflation in the US unexpectedly decelerated in May, weighed down by lower energy prices, while a separate report showed that producer prices rebounded less than anticipated.

"Assuming reasonable trade agreements are reached with most key trading partners of the US, global economic uncertainty is expected to decline," the OPEC said.

The OPEC continues to expect liquid supply from countries not participating in the Declaration of Cooperation, or DoC, to grow by 810,000 barrels a day this year. For 2026, it now estimates supply at 730,000 barrels versus previous projections for 800,000 barrels. The DoC is the name for OPEC+, which comprises OPEC and non-OPEC allies.