The U.S. Energy Information Administration (EIA) on Thursday revised its global oil demand growth forecast down, citing rising trade tensions and higher tariffs. The market resumed its downward trend, which had briefly paused on Wednesday after Washington announced a delay in tariffs for all countries except China.
The EIA now projects oil demand growth of 900,000 barrels per day (bpd) for this year, a reduction from the previous estimate of 1.2 million bpd. The forecast for 2026 has also been adjusted to 1.1 million bpd, slightly lower than the earlier prediction of 1.2 million bpd.
This change follows U.S. President Donald Trump’s decision to postpone reciprocal tariffs for 90 days, except for China. This temporary reprieve briefly boosted market sentiment. However, Trump also raised tariffs on Chinese imports to 125%, escalating the trade conflict. In response, China imposed an 84% tariff on U.S. goods. Analysts remain concerned that this tariff war could lead to a global recession, reducing oil demand.
Oil prices reacted sharply on Thursday, falling more than 4% and nearly 5% in the afternoon before stabilizing somewhat. By 2:11 p.m. ET, Brent crude was down 3.33%, trading at $63.30 per barrel, while U.S. West Texas Intermediate (WTI) crude fell 3.64% to $60.08 per barrel. Additionally, an OPEC+ decision to increase output and a 2.6-million-barrel increase in U.S. crude stockpiles have added to concerns about oversupply.
Wall Street experienced renewed panic by Thursday afternoon, with the selloff continuing. Some analysts speculate that hedge fund manager Bill Ackman’s intervention influenced Trump’s decision to delay tariffs, which temporarily calmed market fears.
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