The International Energy Agency (IEA) on Tuesday sharply cut its forecast for the growth in global oil demand this year, citing escalating trade tensions, a day after a similar step by producer group, Organisation Petroleum Exporting Countries (OPEC).
The move by the IEA, which advises industrialised countries, is the latest indication that the oil demand outlook is weakening in response to U.S.
President Donald Trump’s trade tariffs, which have already driven a steep slide in oil prices, opens new tab this month.
World oil demand this year will rise by 730,000 barrels per day, the IEA said in a monthly report, a sharp cut from 1.03 million bpd expected last month.
“The deteriorating outlook for the global economy amid the sudden sharp escalation in trade tensions in early April has prompted a downgrade to our forecast for oil demand growth this year,” the IEA said.
“Roughly half of this downgrade occurs in the United States and China, with most of the remainder in trade-oriented Asian economies.”
In its first look at 2026, the IEA predicted a further slowdown in global demand growth to 690,000 bpd.
The IEA’s reduction in its 2025 forecast follows a similar move by OPEC on Monday, although the Paris-based IEA’s reduction is more drastic.
The Organization of the Petroleum Exporting Countries lowered its forecasts for oil demand this year and next to 1.30 million bpd and 1.28 million bpd respectively. These were both down 150,000 bpd from last month’s figures.
OPEC’s oil demand view is at the higher end of industry forecasts and it expects oil use to keep rising for years, unlike the IEA, which sees demand peaking this decade as the world switches to cleaner fuels. (Reuters)
