IEA Reduces Oil Demand Outlook on Tariffs a Week After OPEC

TAKEAWAYS KEY

• The International Energy Agency has cut its forecast for oil demand this year and in the following years. It blames the impact of President Donald Trump’s tariffs on global economies.
• The move follows a reduction by OPEC of its forecasts yesterday for the growth in oil demand.
• The IEA stated that it made new forecasts by lowering its assumptions about economic growth.

The International Energy Agency cut its projections for oil demand growth in this year and next, blaming President Donald Trump’s tariffs on the global economy.

The agency said that it is lowering its forecast for oil demand growth this year to 730,000 barrels per day (B/D), a decline of 300,000 barrels per day versus last month’s projection. The agency also predicted that oil demand growth in 2026 will be even slower, at 690,000 barrels per day. The agency stated that these new forecasts were made after lowering their assumptions for economic growth.

The downgrade marks much lower oil demand forecasts than those from the Organization of the Petroleum Exporting Countries (OPEC). OPEC cut its projections yesterday as well due to the impact of tariffs on economic growth.

The IEA said on Tuesday that “arduous trade negotiations are expected to take place over the next 90 days reprieve in tariffs and perhaps beyond, oil markets will be in a bumpy and uncertain ride. Our forecasts for this and next year are also impacted by considerable uncertainties.”

Brent and West Texas Intermediate crude oil futures have both been trading slightly lower recently.