The U.S. Energy Information Administration (EIA) on Thursday revised its global oil demand growth projections downward, citing the impact of rising trade tensions and increased tariffs. This comes as markets resumed their downward slide, which had briefly paused on Wednesday following a U.S. announcement to delay tariffs for all countries except China.
For the current year, the EIA now expects oil demand to grow by 900,000 barrels per day (bpd), down from its earlier forecast of 1.2 million bpd. For 2026, the new projection is 1.1 million bpd, slightly reduced from the previous estimate of 1.2 million bpd.
This revision follows U.S. President Donald Trump’s decision to implement a 90-day delay on reciprocal tariffs, excluding China, which temporarily lifted market sentiment on Wednesday. At the same time, Trump increased tariffs on Chinese imports to 125%, escalating the trade conflict. In response, China imposed an 84% tariff on U.S. goods, fueling concerns that the ongoing tariff war could lead to a global recession and decrease oil demand.
On Thursday afternoon, oil prices reflected the market’s concerns, dropping by over 4% and nearly 5% in the second half of the day, before stabilizing slightly. By 2:11 p.m. ET, Brent crude was trading at $63.30 per barrel, down 3.33%, while U.S. West Texas Intermediate (WTI) crude was at $60.08 per barrel, a decline of 3.64%. Additionally, an OPEC+ decision to increase oil output and a 2.6-million-barrel increase in U.S. crude stockpiles reported on Wednesday further fueled concerns about oversupply.
As market uncertainty grew, Wall Street saw renewed panic by Thursday afternoon, with the selloff resuming. Some analysts speculate that hedge fund billionaire Bill Ackman’s intervention influenced Trump’s decision to delay tariffs, which temporarily calmed the market.
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