Global oil demand growth is set to accelerate this year but the escalating trade war launched by US President Donald Trump threatens to disrupt the market, the International Energy Agency said Thursday.
The IEA noted that crude prices dropped in February and early March as concerns grew about the impact of trade tensions on the global economy and the OPEC+ cartel confirmed plans to raise production next month.
Global oil demand is expected to rise by just over one million barrels per day (bpd) in 2025, up from 830,000 bpd in 2024, according to the Paris-based agency.
That would take overall demand for the year to 103.9 million bpd, with lower oil prices and demand from China fuelling demand.
But the agency, which advises developed countries on energy policy, said it lowered its estimates for the last quarter of 2024 and the first three months of this year.
“New US tariffs will clearly act as barriers to global trade and economic growth in 2025,” the IEA said in its monthly oil market report.
“The lack of clarity due to their on-again off-again nature, combined with the potential for retaliation and escalation, has caused uncertainty to soar,” it added.
The IEA said supply is expected to exceed demand by 600,000 bpd this year, an assessment that helped to push crude prices lower on Thursday.
Brent, the international benchmark contract, fell 0.5 percent to $70.57 per barrel at around 1050 GMT.