Fitch sounds industry alarm: Downgrades global oil and gas outlook to "deteriorate"

Fitch Ratings has downgraded the global oil and gas industry outlook for 2025 from "neutral" to "deterioration", citing reasons such as the US imposing tariffs, OPEC+ increasing production, and non-OPEC+ supply growth collectively suppressing demand. The rating agency stated on Wednesday that it currently expects global oil demand to increase by approximately 800,000 barrels per day this year, lower than the previously forecasted slightly over 1 million barrels. At the same time, the increase in supply means the market will remain in a state of oversupply. "Although some tariffs have been lowered, the uncertainty of the final level of tariff rates and the impact of the tariffs already in place will still be key factors in our macroeconomic forecasts, leading to lower growth in oil consumption than previously expected," Fitch said. The agency also lowered its oil price expectations for 2025 from $70 per barrel in April to $65 per barrel. Fitch pointed out that OPEC+ decision to ramp up production at a faster-than-expected pace is depressing oil prices, but prices could rise if more sanctions are imposed on Russia, Iran, or Venezuela, or if there is a escalation in conflict between Israel and Iran. However, Fitch stated that the adjustment in industry outlook may have limited impact on the credit ratings of individual issuers, as these companies have strengthened their balance sheets "after experiencing high oil prices and strict capital discipline periods".