An oil field at dusk.
Doubts continue to persist over the direction of the oil price following recent market turmoil, with investment bank JPMorgan cutting its forecasts sharply and the International Energy Agency lowering its crude demand growth projections for 2025.
In a note to clients on Tuesday, JPMorgan said oil’s global poxy benchmark Brent crude is now expected to average $66 per barrel this year, down from its earlier estimate of $73. For 2026, the Wall Street bank cut its Brent forecast down to $58.
JPMorgan also lowered its price forecast for the West Texas Intermediate to $62 per barrel from $69, and cut the 2026 forecast down to $53 from $57.
Additionally, the IEA lowered its global oil demand growth forecast by 300,000 barrels per day down to 730,000 bpd in its monthly oil market report, also published on Tuesday. The IEA’s demand growth forecast for 2026 was also revised to 690,000 bpd.
The bearish developments follow U.S. President Donald Trump’s decision to impose trade tariffs on major trading partners, and much higher punitive levels against China on April 2. It has sparked fears of a trade war between the U.S. and China, potentially heightened inflationary pressures and possible risks of a recession.
The IEA specifically mentioned the “fast-moving macro backdrop” for its downward revisions and the uncertainty in accurately pinning down what near-term demand scenarios may look like.
A Fast-Moving Macro Backdrop
Overall market sentiment remains bearish with uncertainty over China’s demand, a weakening in the performance of major economies and what global trade flows may look like for the second half of this year and much of 2026.
“With negotiations and countermeasures still ongoing, the situation is fluid and substantial risks remain. We have lowered the economic growth assumptions that underpin our forecasts, leading to a 400,000 bpd reduction in expected oil demand growth for the remainder of the year,” the IEA said.
“With arduous trade negotiations expected to take place during the coming 90-day reprieve on tariffs and possibly beyond, oil markets are in for a bumpy ride and considerable uncertainties hang over our forecasts for this year and next.”
For its part, the Organization of Petroleum Exporting Countries (OPEC) has also joined much of the market in lowering its near-term oil demand growth projections.
But forecasts offered by oil producers’ group still put demand growth north of seven figures at 1.3 million bpd for 2025, and 1.28 million bpd for 2026 – nearly double that of the IEA.
Oil Price Will Remain Under Pressure
However, Wall Street continues to lean closer to IEA projections than that of OPEC. For instance, JPMorgan now expects demand to increase by 800,000 bpd, with growth averaging only 300,000 bpd in Q3 2025.
What’s more, with the market set to see higher OPEC production of around 1 million bpd and yet more pressure from the Trump White House in favor of lower prices at the pump, there’s little potential for a near-term upshot for oil.
“Higher production volumes from the OPEC+ alliance indicate a shift in the reaction function, which, when combined with weaker demand, will push balances into a large surplus and drive Brent down below $60 towards year-end,” JPMorgan analysts noted, alongside putting forward an “80% probability of a mild recession.”
So, regardless of where the Trump Tariffs go, the oil price will likely remain under pressure for much of the year and even the next.
Disclaimer: The above commentary is meant to stimulate discussion based on the author’s opinion and analysis offered in a personal capacity. It is not solicitation, recommendation or investment advice to trade oil stocks, futures, options or products. Oil markets can be highly volatile and opinions in the sector may change instantaneously and without notice.
