President Donald Trump’s trade war could cause global oil demand growth to fall by nearly a third this year, the Energy Information Administration said Thursday.
The forecast from the EIA, the statistical arm of the Energy Department, comes as Trump’s on-again-off-again tariffs have caused wild stock market swings and helped bring the price of oil down by $12 a barrel in just over a week. Trump’s 125 percent tax on imports from China and other tariffs can cause consumers to stop spending and cause businesses to second-guess making investments, analysts have said.
The EIA said global oil demand could grow by 900,000 barrels a day this year, a reduction of 400,000 barrels compared to its previous outlook. Demand is expected to grow by 1 million barrels a day in 2026, a reduction of 100,000 barrels from its previous estimate.
The EIA “expects recent developments in global trade policy and oil production to contribute to lower global demand growth for petroleum products through 2026, which contributes to significantly lower oil prices than previously forecast,” the agency said in its latest short term energy outlook.
