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The world’s big industrial-scale consumers of oil are flashing warning lights for demand as the tariff war causes the outlook for the global economy to deteriorate.

Several U.S. airlines withdrew earnings guidance for this year over the past several weeks, citing uncertainty in the global economic environment and a recent spate of soft domestic bookings.

In the freight market, more than 40% of container ship capacity between Asia and the U.S. has been canceled for some of the coming weeks and top liners are using smaller vessels to meet customer needs.

Collectively, they offer some of the first real-world reactions to a tariff war that’s meant to reset U.S. relations with the nation’s top trading partners. The aviation and marine fuel sectors account for more than 10% of global oil consumption combined, and there are potential knock-ons for the truckers transporting containers when goods arrive at their destinations, leading to a further threat to diesel consumption.

“The year started out very strong, however, that changed and we saw demand weakened as the quarter progressed, especially in leisure demand,” Bob Jordan, chief executive officer of Southwest Airlines Co., said in an earnings call this month. “We have seen softer booking trends continue into the second quarter.”

Data from the U.S. Bureau of Economic Analysis in the U.S. show that heavy truck sales fell to the lowest level since 2020 last month. Apollo Global Management said it expects trucking demand to grind to a halt in the U.S. next month, leading to layoffs across the industry.

Consultant FGE said this week that it now expects global diesel demand to decline versus a year earlier in the second and third quarters as consumption slows, citing burgeoning impact of the trade war.

“This reflects both worsening trade and reduced manufacturing and industrial activity,” it said.

Still, the picture isn’t uniformly doom and gloom.

United Airlines Holdings Inc. said that while there was a decline in bookings between the U.S. and Canada, its other international travel markets remained robust.

Outside the U.S., some European carriers said they’re yet to see a slowdown in forward bookings before summer. Still, Air France-KLM said it is seeing some softness in economy ticket sales, particularly for transatlantic flights.

Similarly, for come container shipping companies, while volumes to the U.S. from China have fallen, they’ve picked up from other southeast Asian nations.

Hapag Lloyd AG, the world’s fifth-largest container carrier, said about 30% of bookings from China to the U.S. have been canceled, though journeys from Cambodia, Vietnam and Thailand are all heavily up. Clarkson Plc, the world’s largest shipbroker, cut its 2025 profit outlook on Thursday, saying uncertainty from the potential of a trade war has escalated. A cruise shipping line warned Wednesday of softer forward bookings.

The Dow Jones Transportation Average index, which tracks an average of 20 U.S. transportation stocks, is down almost 15% so far this year, outpacing a decline in the S&P 500.

Push and pull

The push and pull means it’s far from the dark days of the early pandemic when global shutdowns crushed consumption by about a third at the same time that key producers were pumping as much as they could, ultimately pulling prices briefly below zero.

But an uncertain outlook and tentative signs of slowdown underscore why oil watchers have been quick to downgrade their forecasts for the year — so far reducing expectations for demand growth by a third. Alongside lower transport fuel consumption, there’s also a threat to petrochemical demand from lower trade — a sector that is expected to provide the majority of oil demand growth this year.

In China, factory activity slipped into the worst contraction since December 2023, revealing early damage from the trade war. South Korean chemical manufacturer LG Chem Ltd. warned that there could be a dampening of demand for its products as a result of tariffs, while the International Energy Agency has already cut its forecasts for the main petrochemical feedstocks.

United Parcel Service Inc. said on an earnings call that small and medium sized business — which make up a third of its total U.S. volumes — are expected to slow down their shipments in the second quarter.

The company added that many of those businesses are 100% single-sourced in China and don’t have the working capital to pull forward inventory of goods.

Japanese shipping giant Mitsui O.S.K. Lines Ltd. said on Wednesday that it expects slower cargo movements across the shipping industry this year and global economic stagnation as a result of U.S. tariffs. It said it was expecting lower rates in its container, car carrier and chemical tanker arms.

The warning adds to a picture of fewer products arriving in the U.S. in the coming weeks, with ramifications for the oil-consuming parts of the economy.

“Bookings and container loadings in Asia overall are down precipitously and will continue in that light for some time,” said Gene Seroka, executive director of the Port of Los Angeles said at a hearing last week. “If you’re a trucker and you’re hauling four or five containers today, you may haul two or three in the future.”

With assistance from Brendan Murray, Jack Wittels and Benedikt Kammel.

Alex Longley, Bloomberg News