US president Donald Trump’s proposed tariffs on steel and aluminium
imports risk a global trade war and could threaten rising oil demand
growth, the International Energy Agency said on Thursday.
Global oil demand is expected to rise by 1.5m barrels a day in 2018 — to
99.3m b/d — which is an upward revision of almost 100,000 b/d, the
Paris-based body said in its monthly oil market report.
But recent signs of protectionism from the US could hit global economic
growth forecasts and in turn trade flows and oil demand, the IEA said.
"A slowdown [in world trade] would have strong consequences,
particularly for fuel used in the maritime sector and in the trucking
industry.”
Global producers from Opec and allies outside of the cartel are
restricting supply to reduce global stockpiles and boost prices, but
they are also banking on rising demand growth.
It is seen as crucial particularly as a rebound in oil prices has
unleashed a wave of new barrels from non-Opec producers led by output
from US shale oilfields.
The growth in world trade, which accelerated from 2.5 per cent in 2016
to 4.7 per cent in 2017, is part of the strong increase in global gasoil
demand last year, the IEA said. While the International Monetary Fund
expects world trade to increase by 4.6 per cent in 2018, any significant
slowdown would hit usage of such fuels, it said.
Rising global economic growth and trade has supported oil demand, with
China and India starting the year on a strong note. Both countries
accounted for nearly half of global demand growth in 2017. Cold weather
in Europe and the US in the first two months of the year also increased
demand for heating fuels.
Global oil supply in February was at 97.9m b/d with production from Opec
countries edging lower to 32.1m b/d, led by losses in Venezuela and the
UAE.
Strong growth in the US is expected to boost production outside of the
Opec cartel in 2018, which will grow by 1.8m b/d compared to 760,000 b/d
in 2017.
(Financial Times)