Opec, IEA slash oil demand forecast for this year

Global oil cartel Opec and energy watchdog International Energy Agency (IEA) have forecasted slower industry demand this year amid a global trade war.

Opec slashed global oil demand growth forecast slightly for this year and the next as US President Donald Trump’s tariff tantrum roils global consumption.

The oil cartel lowered demand growth projections for 2025 and 2026 by about 100,000 barrels per day, projecting an expansion of 1.3 million barrels a day — or about 1% — for each year, an Opec report from its secretariat in Vienna on Monday said.

In comparison, the IEA cut projections for 2025 demand growth by 300,000 barrels a day — or almost a third — to 730,000 barrels a day, according to its monthly report released on Tuesday. Half of the reduction is in the US and China.

Consumption growth will slow further next year, at 690,000 barrels a day, amid “a fragile macroeconomic environment” and the growing popularity of electric vehicles, the Paris-based agency said.

“The deteriorating outlook for the global economy amid the sudden sharp escalation in trade tensions in early April has prompted a downgrade to our forecast,” the IEA analysts wrote.

The lowering of projection comes after oil prices slumped to a four-year low below $60 a barrel in London last week. Brent futures were trading near $65 on Tuesday.

Opec’s estimates are higher than many others in the industry.

Trump’s tariff threats and a surprise move by Opec+ producers to step up output from next month spurred a series of oil-price revisions by analysts including Goldman Sachs Group Inc. and JPMorgan Chase & Co.

Last week, the US government’s Energy Information Administration cut its growth figure for this year by 30% to 900,000 barrels a day, while Goldman Sachs Group Inc. sees consumption rising by 500,000 barrels a day.

Meanwhile, India’s oil demand is estimated to increase by 200,000 barrels per day between April and December this year compared to the same period in the previous year, Opec said.

India’s economic growth forecast has been revised, with a reduction to 6.3% for 2025, while the outlook for 2026 remains unchanged at 6.5%. India’s robust domestic economic development could help offset any external trade shocks, Opec added.

While India’s trade with the US is significant, it remains relatively limited compared to the overall size of its economy. India’s high-growth trajectory is expected to be only slightly impacted by the new tariffs.

In February, India’s oil demand rose by 28,000 barrels per day (y-o-y), a sharp drop from the 132,000 b/d increase seen in January.

Transportation fuels—especially gasoline and diesel—accounted for the biggest monthly demand increases.

Gasoline consumption was bolstered by higher vehicle sales, increased disposable income, and enhanced personal mobility during the Mahakumbh festival (13 January–26 February 2025). Diesel demand grew by 45,000 b/d y-o-y, lower than the 79,000 b/d increase in January.

LPG demand increased by 28,000 b/d y-o-y in February, down from 53,000 b/d in the prior month. The rise was mainly attributed to household needs and a government program, which now accounts for 88.3% of LPG consumption in India.

Jet/kerosene demand rose by 15,000 b/d y-o-y in February, slightly below January’s 17,000 b/d increase. This growth mirrored a rise in air travel, with domestic passenger traffic climbing 11% y-o-y, despite a 3% drop month-on-month, according to India’s Civil Aviation Ministry.

India’s crude oil imports held steady at around 5.0 mb/d in February, nearly unchanged from January. Compared to February 2024, crude imports increased by 446,000 b/d (approximately 10%).

Kpler data showed Russia remained India’s top crude supplier in February, with a 31% share, though this was down from 33% in January due to tighter sanctions.