Recent developments in global trade policy are set to lower global oil and fuel demand growth through 2026, the U.S. Energy Information Administration (EIA) said on Thursday in its monthly short-term energy outlook report.
The U.S. Department of Energy’s statistical arm cut its annual U.S. and global oil demand growth forecasts for both this year and next, as it highlighted significant uncertainty in markets from potentially lower global economic growth and higher oil supply.
Benchmark crude oil futures have plummeted to pandemic lows since U.S. President Donald Trump last week announced a blanket 10% tariff on all U.S. imports and sharply higher duties on dozens of trading partners. In response, China last Thursday slapped additional import levies on imports from the U.S.
While Trump on Wednesday paused the country-specific duties for 90 days, tariffs on imports from China were hiked to 125%. The 10% tariff on imports from all countries is also being implemented.
Analysts have warned escalating trade wars could slow global economic activity and dent oil demand.
The EIA now expects global oil and fuel demand to grow by 900,000-barrels-per-day (bpd) from last year to around 103.6 million bpd this year, it said. It previously expected growth of 1.2 million bpd this year.
For next year, the agency now expects demand growth of around 1.1 million bpd, down from its previous forecast of 1.2 million bpd.
(Reporting by Shariq Khan and Scott DiSavino; Editing by Susan Fenton)