Oil & Gas

The U.S. Energy Information Administration (EIA) has lowered its global oil demand forecast, citing rising trade tensions and tariff policies that are weighing on the global economic outlook. The agency now expects demand to grow by 900,000 barrels per day in 2025, down from the previously projected 1.2 million bpd. The revised outlook comes after the U.S. announced a 10% blanket tariff on all imports and significantly raised duties on Chinese goods, prompting retaliatory tariffs from China.

Alongside weaker demand, the EIA also anticipates an earlier-than-expected increase in oil supply from OPEC+, likely leading to a global crude surplus by mid-2025. This shift in supply-demand balance is expected to further pressure oil prices in the near term. Analysts have described the report as bearish, highlighting the growing challenges facing oil markets amid economic uncertainty and policy shifts.

As a result, the EIA has also slashed its price forecasts. Brent crude is now expected to average $67.87 per barrel in 2025, down sharply from the previous estimate of $74.22. U.S. crude is forecast to average $63.88 in 2025 and $57.48 in 2026, reflecting a cautious outlook driven by both economic and geopolitical developments.