The U.S. Energy Information Administration (EIA) issued a stark warning Thursday, cutting its oil demand and price forecasts through 2026 as escalating trade wars and economic uncertainty threaten energy markets. The agency now expects weaker consumption, higher surpluses, and lower prices—signaling a prolonged downturn for crude.
Key Revisions:
📉 Demand Slowdown:
2025 growth lowered to 900K bpd (from 1.2M bpd), with 2026 trimmed to 1M bpd.
Global demand now pegged at 103.6M bpd in 2025, reflecting trade war drags on GDP.
🛢️ Price Cuts:
**Brent crude forecast slashed to 67.87/barrelin2025∗∗(vs.prior74.22).
**2026 outlook dropped to 61.48∗∗(from68.47), with U.S. WTI at $57.48.
📦 Oversupply Fears:
OPEC+ output hikes and weaker demand may swell global inventories by mid-2025.
Why It Matters:
Trade War Fallout: Trump’s 10% global tariffs and 125% China duties threaten industrial activity and fuel use.
OPEC+ Dilemma: The group’s planned supply increases (411K bpd in May) now risk deepening gluts.
Market Sentiment: UBS calls the EIA report “bearish,” with prices already at 2021 lows.
What’s Next?
Oil’s Floor Test: Brent could test $60/barrel if inventories rise faster than expected.
OPEC+ Response: Emergency meeting likely if prices fall below $65 sustained.
Economic Wildcard: Further tariff escalations could trigger deeper demand cuts.