A Petroleos de Venezuela pump jack on Lake Maracaibo in Cabimas, Venezuela. (Gaby Oraa/Bloomberg)
[Stay on top of transportation news: Get TTNews in your inbox.]
The International Energy Agency slashed forecasts for global oil demand this year amid the brewing trade war, and in its first detailed assessment of 2026 predicted a persistent supply surplus.
The adviser to major economies chopped projections for 2025 demand growth by a hefty 300,000 barrels a day — or almost a third — to 730,000 barrels a day, according to a monthly report on April 15. Half of the reduction was concentrated in the U.S. and China, which are engaged in a full-blown trade war.
Consumption growth will be even slower in 2026, at 690,000 barrels a day, due to “a fragile macroeconomic environment” and the rising popularity of electric vehicles, the Paris-based agency said.
“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,” IEA analysts wrote.
Global oil demand growth is expected to slow in 2025, despite a strong start to the year, as economic & geopolitical headwinds intensify.
Growth is on course to weaken again in 2026, but major market uncertainties remain.
Read more ⬇️ https://t.co/sn0Dsy0KlW
— International Energy Agency (@IEA) April 15, 2025
The downgrade follows a slump in oil prices to a four-year low below $60 a barrel in London last week, after U.S. President Donald Trump announced a slew of punitive trade tariffs. Brent futures have since recovered a little, trading near $65 on April 15.
Trump’s move, coupled with a surprise decision by OPEC+ producers to accelerate production increases next month, spurred a series of oil-price revisions from Wall Street giants including Goldman Sachs Group Inc. and JPMorgan Chase & Co.
As the market slump takes a toll on U.S. drillers, the IEA also lowered estimates for new supplies outside the Organization of the Petroleum Exporting Countries this year by 200,000 barrels a day to 1.3 million barrels a day.
Deepti Yenireddy of Boon.ai explores how artificial intelligence is transforming workflows in the trucking industry. Tune in above or by going to RoadSigns.ttnews.com.
These supply additions will still be more than enough to satisfy the subdued rate of demand, both this year and next. In 2026, production outside OPEC+ will expand by a “robust” 920,000 barrels a day, with growth still dominated by the U.S., Brazil, Canada and Guyana. The global overhang will balloon to 1.7 million barrels a day during the first quarter of next year, according to the agency’s data.
Amid the gloom, the report showed some lingering signs of strength in the oil market. Demand growth during the first quarter was at its strongest since 2023, and world oil inventories are hovering “near the bottom of the five-year range.”
Yet the overall outlook is bearish. Even OPEC’s secretariat — typically more bullish than other forecasters — has acknowledged the deteriorating picture, trimming oil demand projections in its latest monthly report on April 14. Its estimates remain considerably higher than the IEA’s and Wall Street’s.
OPEC leader Saudi Arabia has surprisingly appeared to encourage the market downturn, steering the group to bolster output by three times the scheduled amount in May in a bid to compel fellow members to abide by their output limits. It may be a strategy only for the short term.
For the IEA, the slowdown in growth from the recent average of around 1 million barrels a day fits with its broader outlook that oil consumption will stop growing this decade as the transition from fossil fuels to renewable energy gathers momentum.
