As trade tensions escalate, the IEA sharply lowered the 2025 global oil demand growth forecast

The Zhitong Finance App learned that due to the escalation of trade tension, the International Energy Agency (IEA) drastically lowered its forecast for global oil demand growth this year on Tuesday. The agency cut the 2025 oil demand growth forecast by 300,000 b/d to 730,000 b/d. The agency also anticipates that global oil demand growth will slow further to 690,000 b/d in 2026. The IEA said in its monthly report: “At a time when trade tension suddenly escalated sharply in early April, the global economic outlook continued to deteriorate, which prompted us to lower our forecast for oil demand growth this year.”

At the same time, the IEA also warned that the sharp drop in oil prices has put the US shale oil industry in trouble. According to the Dallas Federal Reserve's latest energy survey report, various shale oil producers believe that oil prices need to be stabilized at 65 US dollars/barrel to make drilling new oil wells profitable.

It is worth mentioning that OPEC also took similar measures a day ago, but it is more optimistic than the IEA. OPEC lowered the forecast for global oil demand growth in 2025 from 1.45 million b/d to 1.3 million b/d, and lowered the forecast for global oil demand growth in 2026 from 1.43 million b/d to 1.28 million b/d. OPEC said in its monthly oil market report that this adjustment is mainly based on data for the first quarter of this year and the expected impact of the tariff policy recently announced by the US on oil demand.

Goldman Sachs becomes a “big short”: oversupply will continue for a long time

Goldman Sachs, known as the “commodity standard-bearer,” recently lowered its expectations for oil prices again. Goldman Sachs indicated in its latest analysis that the global oil market is expected to have an oversupply of 800,000 b/d in 2025, which will increase to 1.4 million b/d in 2026. Goldman Sachs said that the trade war and OPEC+ easing of supply restrictions are increasing pessimism in the market.

Goldman Sachs analysts warned that although the market has absorbed the impact of future inventory increases, large surpluses are expected to occur in 2025 and 2026, which will further depress oil prices. Analysts expect the average price of Brent crude oil to be around $63 per barrel for the rest of the year, but this price is based on the premise that the US will not fall into recession and OPEC+ will only slightly increase its supply.