IEA Forecast Signals Structural Slowdown in Global Oil Demand
The International Energy Agency (IEA) has sharply downgraded its global oil demand growth outlook amid escalating global trade tensions and softening economic activity. For 2025, the IEA now expects demand to grow by just 726,000 barrels per day (bpd)—down from 1.03 million bpd previously. Growth is projected to slow further to 692,000 bpd in 2026, with global GDP expectations revised downward to 2.4% and 2.5% for those years, respectively.
The IEA warns of a turbulent outlook as trade negotiations continue under a 90-day tariff reprieve, and markets remain volatile, with Brent crude at ~$64.66 and WTI at ~$61.57, both at four-year lows. Supply growth is also outpacing demand, contributing to an expected oversupply of 1.2 million bpd in 2025. While OPEC+ plans to increase output, real growth may be closer to 225,000 bpd due to prior overproduction and sanctions. These shifts underscore a long-term structural transformation in energy markets and signal potential disruption across investment, geopolitical alignment, and downstream operations.
Key Data
Global demand growth (2025): Revised to +726,000 bpd from +1.03 million bpd
2026 forecast: +692,000 bpd
Global GDP estimates: Cut to 2.4% (2025) and 2.5% (2026) from 3.1%
OPEC+ planned output hike: +411,000 bpd, but real growth likely ~225,000 bpd
Global supply growth forecast: +1.2 million bpd (2025), +960,000 bpd (2026)
Supply in March: +590,000 bpd overall; OPEC+ reduced, non-OPEC+ grew
Brent crude: $64.66/barrel, WTI: $61.57/barrel—lowest in 4+ years
Iranian crude drop (March): −290,000 bpd
Venezuelan April plunge: Triggered by new 25% U.S. tariff
Conclusion
The IEA’s latest projections crystallize a turning point for global oil markets. The combination of demand stagnation, supply excess, and trade-related volatility is forcing a rethink of long-held assumptions about energy demand trajectories. The current mismatch—where supply increases outpace tepid demand growth—is unlikely to correct itself quickly.
Instead, it will likely trigger a realignment of global energy strategies, with national policies, corporate investment, and capital markets all responding to the new, lower-growth environment. Markets should brace for an extended phase of price instability, geopolitical maneuvering, and structural shifts toward lower-carbon energy systems. Downstream operators, traders, and investors alike will need to position themselves around these evolving dynamics—or risk being left behind.
Wednesday, April 16, 2025
