The International Energy Agency (IEA) has downgraded its oil demand growth forecast for 2025 by 300,000 barrels per day (bpd), citing rising global trade tensions and the economic uncertainty triggered by fresh U.S. tariff actions. In its April Oil Market Report released on Tuesday, the agency now expects demand to grow by just 730,000 bpd in 2025, compared to a 1 million bpd increase projected last month.
The IEA further stated that growth is projected to decelerate even more in 2026, to 690,000 bpd, as persistent geopolitical risks and a volatile macroeconomic environment cloud the global energy outlook. While oil, gas, and refined products were exempted from the latest round of U.S. tariffs, the fear of an inflationary spiral and economic slowdown has already weighed on crude prices.
The agency’s warning comes as the Organization of the Petroleum Exporting Countries (OPEC) and its allies announced a sharp increase in planned production hikes. OPEC+ confirmed it will triple its scheduled supply increases for May to 411,000 bpd, adding further pressure on prices amid concerns about softening demand.
The IEA emphasized that risks to its forecast remain high, particularly in light of ongoing shifts in trade policy, inflation dynamics, and global monetary tightening.
