Global oil demand growth is expected to slow as Donald Trump’s tariff war weighs on the global economy.
The International Energy Agency (IEA) has downgraded its growth estimates for the fourth quarter of last year and the first three months of 2025 to around 1.2 million barrels per day, citing weaker-than-expected data.
The Paris-based agency warned that its oil demand outlook had “deteriorated over the past month” due to escalating trade tensions between the U.S. and multiple countries.
“New U.S. tariffs, combined with escalating retaliatory measures, have tilted macro risks to the downside,” the IEA said.
Despite the downgrade, global oil demand is still projected to exceed one million barrels per day this year, up from 830,000 in 2024, partly supported by lower oil prices. Crude has fallen 13% since peaking in mid-January, shortly before Trump’s return to the White House.
The IEA cautioned: “Risks to the market outlook remain rife, and uncertainties abound.”
During his election campaign, Mr. Trump extensively promoted boosting domestic oil production. Reports indicate that he plans to approve new export permits for liquefied natural gas (LNG) projects and expand oil drilling off the US coast shortly after taking office.
The United States stands as the world’s leading producer of crude oil and the top exporter of liquefied natural gas (LNG).
Citi analysts noted that President-elect Donald Trump’s potential pursuit of “US energy dominance policies aimed at increasing US oil, gas, and power production” is likely to drive down commodity prices.
