IEA, Opec cut oil demand forecast amid escalating global trade war

Intensifying trade wars and a continued supply glut are creating an increasingly bearish outlook for oil markets, analysts say.

- Issac John

Goldman Sachs warned of significant oversupply, forecasting surpluses of 800,000 bpd in 2025 and 1.40 million bpd in 2026, which could push prices lower. In a worst-case scenario — such as a global slowdown or Opect reversing its voluntary cuts of 2.2 million bpd —Brent prices could plummet to the $40 range in 2026, potentially dipping below $40 if conditions worsen.

The International Energy Agency (IEA) and Opec have sharply cut their global oil demand growth forecast for 2025, citing intensifying trade tensions, particularly between the US and China.

The IEA announcement, made on Tuesday, signalled a weakening outlook for oil markets as US President Donald Trump’s trade tariffs ripple across the global economy.

The IEA’s revised projections, combined with falling oil prices and bearish forecasts from Goldman Sachs, paint a grim picture for the energy sector. The IEA now expects world oil demand to grow by just 730,000 barrels per day (bpd) in 2025, down from its earlier estimate of 1.03 million bpd.