Global oil demand likely to weaken on Trump's tariffs: Gunvor

Oil drilling rigs

President Donald Trump’s first round of reciprocal tariffs — prior to further escalation between the US and China — would likely lead to demand loss of about 380,000 barrels per day (bpd), Bloomberg reported, citing an interview for Head of Research at Gunvor Group Frederic Lasserre.

“I think the market overreacted... Not only on oil, but on equities people were pricing a global recession. I think this was a bit too aggressive, at least for now, and from here I see a bit more upside than downside,” he was quoted as saying, pointing to the pullback in Brent crude futures to below $60 a barrel last week.

Lasserre explained that the drop in oil prices to below $60 a barrel means no growth in demand for crude oil, which could reverse the upward trend in crude prices as refining margins decline.

If West Texas Intermediate stays near $60 a barrel, there is unlikely to be any growth from US shale fields next year. Supply would still expand in conventional US fields, however, he further stated.