The International Monetary Fund (IMF) forecasts a decline in oil prices to $66.90 per barrel in 2025, nearly $6 lower than its previous projection. This is due to the expected end of OPEC+ production cuts and rising supply from non-OPEC+ countries outpacing weak global demand. The oil market is expected to be moderately oversupplied, with bearish trends putting downward pressure on prices. Global oil demand has weakened due to policy uncertainty and trade tensions.
The IMF urges petrostates to diversify revenue sources and phase out energy subsidies. It also downgraded economic growth forecasts for Middle Eastern oil exporters from 4% to 2.3%.The International Monetary Fund (IMF), in its latest Regional Economic Outlook for the Middle East and Central Asia released on Thursday, stated that rising trade tensions and policy uncertainty across the region are compounding the effects of ongoing conflicts and prolonged oil production cuts, thereby dampening growth prospects.Non-oil growth across the Middle East is also expected to fall short of October forecasts, as major oil-producing nations are likely to revise their investment plans in response to declining oil prices.
The IMF emphasized that, given the heightened uncertainty surrounding oil prices, it is crucial for MENA oil exporters to safeguard fiscal reserves and ensure fair distribution of natural resource wealth across both present and future generations.Additionally, the IMF recently lowered its 2025 GDP growth projection for Saudi Arabia to 3.0%, down from an earlier estimate of 3.3%, citing a 13% drop in oil prices over the past month.
