The Tariff Storm Sweeps Through the Oil Market, IEA Slashes This Year's Oil Demand Growth Forecast by 30%

The International Energy Agency (IEA) significantly revised down its forecast for global oil demand growth this year in its monthly report released on Tuesday (April 15), citing escalating trade tensions that are putting pressure on the global economy.

Specifically, the report shows that the IEA now expects global oil demand growth in 2025 to be 730,000 barrels per day. In comparison, this figure was 1.03 million barrels per day in the March report, representing a decrease of 300,000 barrels. The IEA also anticipates that the growth rate will further slow to 690,000 barrels per day in 2026.

The IEA explained that after a period of relative calm, the global oil market was thrown into turmoil in early April due to a series of trade tariff announcements. As trade tensions escalated sharply and some OPEC+ countries potentially increased supply, benchmark oil prices fell to their lowest level in four years.

Affected by Trump's "reciprocal tariffs," Brent crude prices fell to $58 per barrel last week, a level last seen in February 2021. However, as Trump delayed some tariffs by 90 days, Brent crude prices rebounded to between $64 and $65.

Brent Crude Price Daily Chart

The IEA report stated that concerns over Trump's tariff measures potentially triggering a surge in inflation, slowing growth, and intensifying trade disputes are all factors that could weigh on oil prices. With negotiations and countermeasures still ongoing, the situation remains volatile, and risks are significant.

The International Energy Agency expects that the oil market will experience a bumpy period during the 90-day tariff suspension and the difficult trade negotiations that will follow, "Our forecasts for this year and next remain subject to considerable uncertainty."

The day before, OPEC also revised down its oil demand expectations in its monthly report, lowering the expected year-on-year increase in global daily oil demand for 2025 from 1.45 million barrels to 1.3 million barrels; the report also reduced the demand forecast for 2026 from 1.43 million barrels to 1.28 million barrels.

The report noted that the global economy showed steady growth at the beginning of the year, but OPEC also acknowledged that recent trade-related developments have introduced greater uncertainty into the short-term global growth outlook.

Earlier in the day, analysis from Wall Street giant Goldman Sachs indicated that the global crude oil market is expected to see a daily surplus of 800,000 barrels in 2025, increasing to 1.4 million barrels in 2026.