IEA warns global oil demand stalls as tariffs erupt
blooming no change in global oil demand slows 16‑year climb
blooming no change in global oil demand slows 16‑year climb
Story outline
- International Energy Agency notes oil demand growth drops to its lowest pace except 2020.
- Tariff threats from President Trump appear to affect several economies.
- Future forecast shows oil supply likely to outstrip demand through 2026.
broad trend overview
The IEA’s monthly review announces that worldwide oil demand added only 1.1 m b/d in the first quarter, but the increase fell to a modest 0.5 m b/d by the second quarter. The agency describes the quarterly contraction as one of the sluggishest in 16‑years, with the pandemic‑shaped slump in 2020 standing out as the sole exception.
tariff impact question
Although the IEA cautions that attributing the slowdown directly to tariffs may be premature, the report points out that the strongest quarterly declines came from countries that were targeted by President Trump’s tariffs—China, Japan, South Korea, and Mexico.
resilience in other markets
Oil demand remained comparatively steady in European and Asian emerging economies that also faced tariff pressure, suggesting that those markets are more resilient to the trade‑policy turmoil.
future supply‑demand outlook
Looking ahead, the IEA projects oil supply to surpass demand for the first time in 2025, with output expected to rise by 2.1 m b/d to an average of 105.1 m b/d, while demand averages 103.7 m b/d. In 2026, the agency expects demand to tack up slowly by 0.72 m b/d to 104.4 m b/d, and supply to climb by 1.3 m b/d to 106.4 m b/d.
conclusion
In summary, global oil demand growth has eased to a historic low, tariff threats appear to be contributing to the contraction in select economies, and the IEA forecasts that supply will edge out demand through 2026.
