S&P analysis: Global refined product demand growth likely to weaken, absolute decline cannot be ruled out
Despite the announced pause in U.S. tariffs, recent market volatility and ongoing uncertainty are going to have a dramatic impact on global refined product demand, a new analysis S&P Global Commodity Insights analysis says.
Citing extreme volatility and uncertainty about U.S. trade policy, including whether or not the 90-day tariff pause announced on April 9 proves temporary, the new Global Crude Oil Markets report says that refined product demand growth for the rest of 2025 could be cut by up to a third and that an absolute decline cannot be ruled out if more severe tariff scenarios come to fruition.
“Extreme unpredictability will inhibit overall investment and consumption in the United States and elsewhere. Until clarity and confidence return about what the new rules of trade are, investors and consumers will remain in limbo,” said Jim Burkhard, Vice President and Head of Research for Oil Markets, Energy and Mobility, S&P Global Commodity Insights.
From April 1 to April 9, Dated Brent, the most important energy price in the world, fell by $15. Yet, it is the context of the current situation—more than the recent price movements themselves—that is the most consequential, the analysis says.
Such dramatic price movements are not particularly rare—even in times of relative normalcy, the report notes. Prices fell by about $12/bbl over seven trading days in August–September 2024. Earlier, in April–June 2024, prices fell by about $11/bbl over 17 trading days and, more broadly, about $17/bbl over 37 trading days.
What makes the present situation stand apart is the extreme level of unpredictability, the report says.
“The sharp decline in crude oil prices in recent days, while not particularly extraordinary in historical terms, is unique because of the changing context it reflects—the extreme uncertainty that now pervades expectations of trade, economic well-being and relations between the world’s nations. There is a sense that near-term confrontations and conflicts could swiftly escalate, pitching the world into perilous situations,” said Bhushan Bahree, Executive Director, Global Oil, S&P Global Commodity Insights.
Meanwhile, steep tariffs remain in place on trade between the United States and China.
How the US-China economic dispute plays out will be a key signpost for oil markets, the analysis says.
“What we are seeing in April 2025 is a reordering of global trading norms that emerged after World War 2. We know the old system is no longer, but it is not clear what is going to replace it. And we may not know for a while to come. The same may well be said for the postwar international security order,” said Burkhard.
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