Oil & Gas IEA slashes oil demand outlook as trade tensions bite By Eva Levesque April 15, 2025, 3:31 PM Benoit Tessier/Reuters Fatih Birol, the director of the International Energy Agency, which has downgraded its outlook for oil demand far below Opec’s forecast IEA predicts growth of 730,000 bpd Anticipates further easing in 2026 Blames drag on tariff fallout The International Energy Agency (IEA) slashed its 2025 oil demand growth forecast on Tuesday, citing rising trade tensions and a weakening global economy. The forecast widens the gap with Opec’s more upbeat outlook. The Paris-based watchdog now expects demand to grow by just 730,000 barrels per day in 2025, down from 1 million bpd previously forecast. Growth is projected to ease further to 690,000 bpd in 2026, the IEA said in its monthly report. “Escalating trade tensions have negatively impacted the economic outlook,” the IEA said. “After a period of relative calm, global oil markets were roiled by a barrage of trade tariff announcements in early April.” US President Donald Trump’s imposition of sweeping tariffs – energy products are excluded – has triggered market jitters, particularly with levies on Chinese goods rising to 145 percent. The IEA said that the resulting economic drag, coupled with surprise output hikes from Opec+ producers, has fuelled a “downward spiral in oil prices”. Eight Opec+ members accelerated the unwinding of voluntary cuts, adding 411,000 bpd in May – three times the previously scheduled increase – further pressuring prices. Oil crude fell to a four-year low earlier this month. It has since rebounded, as Trump granted a 90-day reprieve on some tariffs. Opec cuts 2025 oil demand forecast on tariff trade tensions Oil hit as Opec+ agrees to increase production Oil demand growth to halve in wake of Trump tariffs Brent traded at $64.84 a barrel on Tuesday, while WTI stood at $61.50. Concerns that the measures could stoke inflation, slow economic growth and intensify trade disputes weigh on oil prices. The IEA’s downgrade puts it far below Opec’s forecast of 1.3 million bpd growth in 2025. Analysts at S&P Global and others have also trimmed forecasts to about 700,000 bpd. “Oil markets are in for a bumpy ride and considerable uncertainties hang over our forecasts,” the IEA said. Register now: It’s easy and free AGBI registered members can access even more of our unique analysis and perspective on business and economics in the Middle East. Why sign uP Exclusive weekly email from our editor-in-chief Personalised weekly emails for your preferred industry sectors Read and download our insight packed white papers Access to our mobile app Prioritised access to live events Register for free Already registered? Sign in I’ll register later
