PARIS, May 15, 2025 (BSS/AFP) - Global oil demand is expected to grow a hair higher than previously forecast this year as trade tensions have eased and crude prices have fallen, the International Energy Agency said Thursday.

US President Donald Trump launched a tariff blitz in April that rocked financial markets and raised concerns about an economic slump, which in turn would slow oil demand.

While a 10-percent tariff on US imports from nearly every nation remains in place, Trump has paused higher levies on major trading partners to give space for negotiations.

The Paris-based IEA, which advises developed countries on energy policy, said it now expected the world economy to perform better than previously thought as the "tariff supply shock" appears less severe.

"Subsequent pauses, concessions, exemptions and negotiations are likely to attenuate the levies' permanence and economic impact," the IEA said in its monthly oil market report.

"Still, policy uncertainty is high, weighing on consumer and business sentiment," it said.

Oil prices sank last month following Trump's tariffs barrage and a surprise decision by OPEC+ countries to sharply hike production.

"Falling oil prices are set to boost consumption," the IEA said.

On average, oil demand is expected to grow by 740,000 barrels per day this year, up from 730,000 bpd in the IEA's April market report.

The agency said demand growth reached 990,000 barrels per day (bpd) in the first three months of this year but was projected to slow to 650,000 bpd over the rest of the year due to "economic headwinds" and record electric car sales.

In total, oil demand is expected to reach 103.9 million bpd in 2025.