Trade tensions are heating up 6 and so are energy bills. A new analysis by global consultancy Wood Mackenzie warns that sweeping U.S. tariffs could chill oil demand, stall renewable projects and push the U.S. into high-cost isolation.
Under the toughest 'trade war' scenario, U.S. effective tariff rates top 30%, global GDP shrinks by 2.9% by 2030, and oil demand plunges. Here’s what to watch:
- Oil Demand Dive: By 2026, demand could fall outright, resuming growth only in 2027 6 yet remain 2.5a0million barrels per day below optimistic forecasts by 2030.
- Price Shock: Crude may slump to $50/barrel in 2026, undercutting U.S. shale’s breakeven and forcing production cuts.
- Renewables at Risk: Tariff-driven cost uncertainty delays projects in a sector with 5- to 10-year planning cycles.
- Metals & Mining Crunch: Aluminum use could slump 4a0million tonnes, copper 1.2a0million tonnes, steel 90a0million tonnes and lithium 70,000a0tonnes by 2026.
Once touted as a tool to rebuild U.S. supply chains, tariffs may instead deepen reliance on high-cost domestic energy, deter overseas investment and derail the clean energy transition. As companies rethink strategy in a climate of prolonged uncertainty, the U.S. faces a critical choice: double down on trade barriers or chart a new path toward open markets and sustainable growth.
With global energy markets already juggling decarbonization goals and shifting demand, the stakes for entrepreneurs, policymakers and consumers have never been higher. Will the U.S. recalibrate its tariffs or risk an energy squeeze that reverberates worldwide?
Reference(s):
U.S. tariffs to trigger energy crisis amid global economic uncertainty
cgtn.com
