The International Energy Agency said this week that the macroeconomic conditions underpinning its previously released oil-demand projections have worsened over the past month with global trade tensions, and that it sees a bigger-than-anticipated supply surplus if OPEC+ raises output beyond April, The Wall Street Journal reports.
“New U.S. tariffs will clearly act as barriers to global trade and economic growth,” the Paris-based agency says. “The lack of clarity due to their on-again off-again nature, combined with the potential for retaliation and escalation, has caused uncertainty to soar.”
The IEA expects a tariff-induced “stagflationary” scenario–a combo of poor growth mixed with rising prices–to weigh on overall oil-demand growth.
In response to the uncertainty, the agency has lowered its demand-growth estimates for the fourth quarter of last year and first quarter of this year to around 1.2 million barrels a day. New estimates predict global demand to grow 1.03 million barrels a day from 1.1 million barrels a day previously, reaching 103.9 million barrels a day on average.
