Fitch downgrades 2025 global oil and gas outlook to ‘deteriorating’

FITCH Ratings has revised its 2025 outlook for the global oil and gas sector to ‘deteriorating’ from ‘neutral’, citing mounting pressure from accelerated Opec+ output, increased non-Opec+ supply, and the lingering impact of US tariffs on global trade.

The credit ratings agency now anticipates global oil demand to rise by approximately 800,000 barrels per day this year – a downward revision from its earlier forecast of just over one million barrels per day.

“There has been some tariff de-escalation; however, uncertainty over where tariff rates will settle and the impact of those tariffs already implemented will remain key factors in our macroeconomic forecasts, leading to lower-than-previously expected oil consumption increases,” Fitch said in a statement on Wednesday.

Fitch has also trimmed its 2025 oil price assumption to US$65 (RM274.49) per barrel, down from US$70 in April. The downgrade reflects what it described as Opec+’s unexpectedly swift ramp-up in production, which is adding to a global supply glut and placing downward pressure on prices.

However, Fitch noted that geopolitical developments could still lift oil prices. “Prices could rise if more sanctions are placed on Russia, Iran or Venezuela, or if the conflict between Israel and Iran escalates,” it added.

Despite the sectoral downgrade, Fitch said the change is unlikely to materially affect the credit ratings of individual oil and gas issuers. Many firms have strengthened their balance sheets in recent years on the back of elevated oil prices and improved capital discipline.

The revised outlook adds to a growing sense of caution across global energy markets, as slowing consumption and policy uncertainty cloud what had been a resilient post-pandemic recovery. - June 12, 2025