EIA Cuts Oil Demand Forecast as U.S.-China Tariff War Sends Prices Crashing
April 11, twenty twenty-five Amid rising trade tensions and new rounds of tariffs, the United States (U.S.) Energy Information Administration (EIA) on Thursday lowered its predictions for worldwide oil demand growth as oil prices fell more than 4 percent in a turbulent trading day.
The EIA now predicts 2025 global oil demand growth at 900,000 barrels per day (bpd), down from its previous estimate of 1.2 million bpd. The forecast for 2026 has also been cut somewhat to 1.1 million bpd. The change comes as financial markets react to a fresh wave of economic uncertainty caused by the U.S.-China trade spat.
China retaliated with an 84 percent tax on American products after U.S. President Donald Trump decided to impose a 125 percent tariff on Chinese imports. Trump's Wednesday announcement of a 90-day delay of reciprocal tariffs for all countries except China prompting a temporary market recovery has fueled renewed concerns of a worldwide recession in light of rising tensions with Beijing.
Oil prices changed quickly. By 2:11 p.m. ET, Brent crude was down 3.33 percent to USD 63.30 per barrel, and U.S. West Texas Intermediate (WTI) was down 3.64 percent to USD 60.08 per barrel. Earlier in the day, losses had approached 5 percent before recovering somewhat.
A recent OPEC+ choice to expand production and an unexpected 2.6-million barrel rise in U.S. oil stocks published Wednesday stoked oversupply worries. These elements, taken together, have increased downward pressure on an already weak market.
Once again, Wall Street started its selloff on Thursday as investor confidence was disturbed. Though tensions are still high, market speculation suggests hedge fund billionaire Bill Ackman is the major factor behind Trump's interim tariff relief.
Analysts say that unless trade relations improve, reduced oil demand and erratic markets will continue until the latter part of 2025.
