IEA warns of ‘disorderly Brexit’ and trade spat impact on oil demand

Global oil demand could be hit by a “disorderly Brexit”, the International Energy Agency (IEA) said in a report on Monday, giving its first warning about the potential impact of the UK’s exit from the EU on global energy markets.

Uncertainty stemming from trade conflicts and concerns about an ill managed Brexit were major factors determining oil consumption.

“Ongoing trade disputes between major powers and a disorderly Brexit could lead to a reduction in the rate of growth of international trade and oil demand,” the Paris-based organization added in its outlook for oil in the coming five years.

These factors could further reduce demand growth between 2019 and 2024, largely led by a slowdown in Chinese consumption.

Oil demand will increase from 100.6 million barrels a day (bpd) this year to 106.4 million bpd in 2024.

Jet fuel and petrochemicals, which are used in plastics, will keep oil demand robust, the IEA said.

On the other hand, confidence in the health of the world economy has deteriorated amid tighter financial conditions, rising trade tensions, slowing Chinese growth and a deceleration in global industrial activity, the IEA noted.