06:50 AM EDT, 04/11/2025 (MT Newswires) -- Global oil demand growth is expected to weaken and contribute to lower crude prices than previously forecast due to recent developments in global trade policy and oil production, the U.S. Energy Information Administration reported on Thursday.

The EIA in its April Short-Term Energy Outlook noted numerous developments affecting the global market, especially oil markets, resulting in significant uncertainties in energy supply, demand and prices.

These developments include U.S. President Donald Trump's tariff announcements and China's reciprocal tariffs. In addition, members of the Organization of the Petroleum Exporting Countries and allied producers announced that some countries will start oil output hikes in May that were originally set for July.

The announcements resulted in the benchmark Brent crude spot price falling 12% on April 2. The EIA completed its forecasts on April 7, but the agency expects continued volatility as market participants respond to further developments.

Global oil inventories are expected to increase starting in the middle of 2025, but market uncertainty could lead to lower economic growth, which could lead to less growth in demand for petroleum products than previously forecast, the EIA said.

The EIA now expects the Brent crude price to average less than US$70/barrel in 2025 and fall to an average of just over US$60/b in 2026.

These prices are about 10% lower than the previous month's STEO forecast and reflect more uncertainty around global oil demand growth and potentially higher supply from OPEC+.

Other uncertainties in the EIA's oil price forecasts include existing sanctions on Russia, Iran and Venezuela.

The agency also forecast the U.S. retail price for gasoline to average about US$3.10/gallon this summer due to expected lower crude oil prices. This would be the lowest inflation-adjusted summer average gasoline price since 2020.