Trade War Threatens Oil Demand, IEA Says
OPEC+ Boosts Supply
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Global oil demand is under pressure from the escalating trade war at the same time that OPEC+ is reviving output, threatening to deepen a supply surplus, the International Energy Agency said.
A slower pace of oil deliveries in recent months prompted the IEA to trim forecasts for this year鈥檚 consumption growth, according to its latest monthly report.
World markets face a surplus of 600,000 barrels a day in 2025, and last week鈥檚 surprise announcement by OPEC+ could add another 400,000 barrels a day, it said.
鈥淭he macroeconomic conditions that underpin our oil demand projections deteriorated over the past month as trade tensions escalated between the United States and several other countries,鈥 the Paris-based agency said. The flurry of tariffs has 鈥渢ilted macro risks to the downside.鈥
Global oil supply is expected to exceed demand in 2025, but market uncertainties abound.
Potential OPEC+ output shifts, trade tensions & sanctions on major producers could reshape the outlook.
Read more in our March Oil Market Report 猬囷笍 鈥 International Energy Agency (@IEA)
Oil is trading near $71 a barrel in London after sinking to the lowest since 2021 last week, following OPEC+鈥檚 decision to gradually restart halted production from April, and President Donald Trump鈥檚 on-off announcements of punishing tariffs on China, Europe, Canada and Mexico.
The Organization of Petroleum Exporting Countries, led by Saudi Arabia and Russia, surprised oil traders on March 3 when it agreed that long-delayed plans to gradually increase production would go ahead next month. Trump had called on the cartel to lower fuel prices.
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The IEA, which advises major economies, reduced projections for growth in world oil consumption this year by roughly 100,000 barrels a day to about 1 million a day. Global demand will average 103.9 million barrels a day in 2025, and Asia will account for almost 60% of this year鈥檚 growth, it projects.
The expansion in demand will be eclipsed by another 1.5 million barrel-a-day surge in oil supplies, led by the U.S., Brazil, Canada and Guyana. As a result, world markets are headed for a surplus even if OPEC+ exercises its option to cancel the rest of its scheduled production increases, the IEA said.
