The International Energy Agency (IEA) on Tuesday sharply reduced its forecast for the growth in global oil demand this year, citing escalating trade tensions. This announcement came just a day after a similar action by the producer group OPEC. The move by the IEA, which provides guidance to industrialized nations, serves as the latest indication that the outlook for global oil demand is weakening in response to U.S. President Donald Trump’s trade tariffs, which have already triggered a significant decline in oil prices this month.
World oil demand growth predictions
The IEA reported that world oil demand this year is expected to increase by 730,000 barrels per day, a notable reduction from the previously anticipated 1.03 million bpd. “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 stated. “Roughly half of this downgrade occurs in the United States and China, with most of the remainder in trade-oriented Asian economies.”
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Long-term global demand trends
In its first assessment for 2026, the IEA projected a further slowdown in global demand growth to 690,000 bpd.
The Organization of the Petroleum Exporting Countries lowered on Monday its projections for oil demand this year and next to 1.30 million bpd and 1.28 million bpd, respectively, both down by 150,000 bpd from last month’s estimates.
Factors influencing oil demand
This slight adjustment is largely attributed to data received for the first quarter of 2025 and the anticipated impacts on oil demand due to recently announced U.S. tariffs, as noted in the report. In the OECD, oil demand is predicted to grow by 0.04 million barrels per day, while non-OECD demand is expected to expand by nearly 1.25 million barrels per day in 2025. Furthermore, the forecast for global oil demand growth in 2026 has been adjusted down slightly to approximately 1.3 million barrels per day. The OECD is expected to see growth of around 0.1 million barrels per day year-on-year in 2026, while demand in the non-OECD is forecast to rise by 1.2 million barrels per day year-on-year in the same period.
Economic impact of trade tensions
“The global economy showed a steady growth trend at the beginning of the year; however, the near-term trajectory is now subject to higher uncertainty given the recent tariff-related dynamics. Consequently, the global economic growth forecasts have been revised down slightly to 3.0 percent for 2025, and to 3.1 percent for 2026,” OPEC commented.
