IEA Slashes 2025-2026 Oil Demand Forecasts Amid Trade Tariff Impact
The International Energy Agency (IEA) has significantly reduced its oil demand growth projections for 2025 and 2026, attributing the downward revision to the economic strain caused by ongoing trade tariffs.
Key Insights:
- The IEA has lowered its oil demand growth forecast for 2024 to 730,000 barrels per day, a reduction of 300,000 barrels per day compared to previous estimates.
- Projections for 2026 show further deceleration, with growth expected at 690,000 barrels per day.
- These adjustments follow OPEC's recent downward revision of oil demand forecasts, both citing the negative effects of trade tariffs on global economic growth.
The International Energy Agency announced on Tuesday a significant revision to its oil demand outlook for the current year and the near future. The agency attributes this downgrade primarily to the adverse economic impacts stemming from the tariffs imposed during recent trade tensions.
Lowered assumptions about global economic growth have led the IEA to adjust its expectations, signaling a more cautious outlook for oil consumption worldwide. This marks a notable shift from previous forecasts and aligns with similar adjustments made by the Organization of the Petroleum Exporting Countries (OPEC).
The IEA cautioned that ongoing trade negotiations, including the upcoming 90-day tariff reprieve, create substantial uncertainty, suggesting that oil markets may experience volatility in the near term.
In response, Brent and West Texas Intermediate (WTI) crude oil futures have experienced slight declines in recent trading sessions.
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