Crude reality: Still no love for Oil, even in a tariff reprieve world

As flagged in our weekend note “Crude Reality: Back on the Bear Wagon”, oil just can’t catch a sustainable bid — even with the market slipping into tariff relief syndrome. The headline reel keeps bleeding lower, and the latest blow comes courtesy of the IEA, which just slashed its oil demand growth forecast again in the wake of Trump’s tariff barrage.

Let’s call it what it is: global demand is taking a hit. The IEA chopped 2025 growth expectations by nearly a third — from 1.03mn b/d to just 730,000 b/d. And they’re already teeing up more cuts if this tariff tit-for-tat drags on. Even though oil, gas, and refined products were exempted from Trump’s initial “Liberation Day” tariffs, the collateral damage to macro sentiment is real: inflation fears, growth downgrades, and a messier trade landscape. That’s not bullish for crude.

Sure, Brent staged a bounce back to $67.75 + on Tuesday after slipping below $60 last week — a level we haven’t seen in four years — but don’t mistake that for a recovery. The IEA is already penciling in a further demand slowdown into 2026, down to just 690,000 b/d. Low prices might soften the blow, but they won’t rescue demand in a world where trade wars are rewriting global growth expectations.

And just to twist the knife, OPEC+ decided to get cute. Eight members led by Saudi Arabia have surprised the market by accelerating their production hikes, announcing a 411,000 b/d boost next month. The IEA says don’t take that number at face value — a lot of those producers (looking at you, Iraq, UAE, Kazakhstan) are already pumping above quota. So the supply shock might be more smoke than fire, but it still adds pressure.

The bottom line: Continue to sell the bounce until proven wrong.

Oil’s biggest headwind right now isn’t oversupply — it’s macro rot. Unless demand rebounds or tariffs ease in a meaningful way, the bear wagon stays in motion. The only real bounce you're seeing? Traders ducking for cover, not rushing in to buy.